Case 0:15-cv-60423-WJZ Document 90-1 Entered on FLSD Docket … › system › files › documents...
Transcript of Case 0:15-cv-60423-WJZ Document 90-1 Entered on FLSD Docket … › system › files › documents...
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 1of41
UNITED STATES DISTIUCT COURT SOUTHERN DISTRICT OF FLORIDA
CASE NO 015-CV-60423-WJZ
FEDERAL TRADE COMMISSION et al
Plaintiffs
v
CAlUBBEAN CRUISE LINE INC et al
Defendants
STIPULATED ORDER FOR PERMANENT INJUNCTION AND CIVIL PENALTY JUDGMENT
AGAINST PACIFIC TELECOM DEFENDANTS
The Federal Trade Commission (Commission or FTC) and the States ofColorado
Florida Indiana Kansas Mississippi Missouri North Carolina Ohio and Washington through
their Attorneys General and the State of Tennessee through the Tennessee Regulatory Authority
(co11ective1y Plaintiffs) filed their First Amended Complaint for civil penalties permanent
injunction and other equitable relief in this matter pursuant to Sections S(a) 5(m)(l)(A) I3(b)
and 16(a) of the FTC Act 15 USC sectsect 45(a) 45(m)(1)(A) 53(b) and 56(a) and Section 6 of
the Telemarketing and Consumer Fraud and Abuse Prevention Act (the Telemarketing Act)
15 USC sect 6105 Pacific Telecom Communications Group (Pacific Telecom) International
Telephone Corporation (ITC) Telephone Management Corporation (TMC) International
Telephone LLC (4IT LLC) TM Caller ID LLC (TM Caller ID) and Fred Accuardi
(Accuardi) (collectively the Pacific Telecom Defendants) have waived service of the
summons the Complaint and the First Amended Complaint Plaintiff and Pacific Telecom
Defendants stipulate to the entry of this Stipulated Order for Permanent Injunction and Civil
Penalty Judgment (Order) to resolve all matters in dispute in this action between them
THEREFORE IT IS ORDERED as foJlows
Page I of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 2 of 41
FINDINGS
l This Court has jurisdction over this matter
2 The First Amended Complaint charges that Pacific Telecom Defendants engaged in
deceptive acts or practices in violation of Section 5(a) of the FTC Act 15 USC sect 45(a) and the
FTCs Telemarketing Sales Rule (the TSR) as amended 16 CFR Part 310 by assisting and
facilitating numerous telemarketers who made millions ofprerecorded robocalls in violation of
Section 310-4 of the TSR
3 Pacific Telecom Defendants neither admit nor deny any of the allegations in the First
Amended Complaint except as specifically stated in this Order Only for purposes of this action
Pacific Telecom Defendants admit the facts necessary to establish jurisdiction
4 Pacific Telecom Defendants waive any claim that they may have under the Equal Access
to Justice Act 28 USC sect 2412 concerning the prosecution of this action through the date of
this Order and agree to bear their own costs and attorney fees Pacific Te)ecom Defendants
waive and release any claims that they may have against Plaintiffs the Commission and their
agents that relate to this action
5 Pacific Telecom Defendants and Plaintiffs waive all rights to appeal or otherwise
challenge or contest the validity of this Order
DEFINITIONS
For the purpose of this Order the following definitions apply
A Assisting Other Persons means providing any of the following goods or services to
another person while knowing or consciously avoiding knowing that the person receiv ing
assistance is engaged in an act or practice that is prohibited by this Order (i) serving as an
officer director or consultant (ii) providing or arranging for access to services that remit to
Page 2 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 3 of 41
telemarketers or sellers the fees generated by caller identification inquiries (iii) providing or
arranging for access lo services that allow users lo assign or change the name of the calling party
displayed by caller identification services or (iv) providing any other substantial help or
assistance
B Caller Identification Service means a service that allows a telephone subscriber to
have the telephone number and where available name of the calling party transmitted
contemporaneously with the telephone call and displayed on a device in or connected to the
subscribers telephone
C Corporate Defendants means Pacific Telecom Communications Group lnternational
Telephone Corporation International Telephone LLC TM Caller ID LLC Telephone
Management Cotporation and their successors and assigns
D Established Business Relationship means a relationship between a Seller and a
person based on (a) the persons purchase rental or 1ease of the Sellers goods or services or a
financial transaction benveen the Seller and person vithin the eighteen months immediately
preceding the date of the Telemarketing call or (b) the persons inquiry or application regarding
a product or service offered by the Seller within the three months immediately preceding the
date of a Telemarketing call
E Individual Defendant means Fred Accuardi
F National Do Not Call Registry means the National Do Not Call Registry which is the
do-not-call registry maintained by the Commission pursuant to 16 CFR sect 3104(b )(1 )(iii)(B)
G Outbound Telephone Call means a telephone call initiated by a telemarketer to induce
the purchase of goods or services or to solicit a charitable contribution
H Representatives means Corporate Defendants officers agents servants employees
Page 3 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 011272017 Page 4 of 41
attorneys and those persons in active concert or pa1ticipation with them who receive actual
notice of this Order by personal service or otherwise
I Seller means any person who in connection with a telemarketing transaction provides
offers to provide or arranges for others to provide goods or services to the customer in exchange
for consideration whether or not such person is under the jurisdiction of the Commission
J Telemarketer means any person who in connection with telemarketing initiates or
receives telephone calls to or from a customer or donor
K Telemarketing means any pian program or campaign which is conducted to induce
the purchase of goods or services by use ofone or more telephones and which involves a
telephone call
ORDER
I PERMANENT BAN ON ROBOCALLS
IT IS ORDERED that Pacific Telecom Defendants whether acting directly or through an
inte1mediary are permanently restrained and enjoined from initiating causing others to initiate
or Assisting Others Persons initiating any Outbound Telephone Call that delivers a prerecorded
message
II PROHIBITION AGAINST ILLEGAL TELEMARKETING PRACTICES
IT IS FURTHER ORDERED that Pacific Telecom Defendants and their Representatives
whether acting directly or indirectly in connection with Telemarketing are permanently
restrained and enjoined from engaging in causing others to engage in or Assisting Other
Persons engaging in the fo llowing practices
A Initiating an Outbound TeJephone CaII to any person whose telephone number is
on the National Do Not Call Registry unless Pacific Telecom Defendants prove
that
Page 4 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 5 of 41
I the Seller has obtained the express agreement in writing of such person to
place calls to that person Such written agreement shalJ clearly evidence
such persons authorization that calls made by or on behalfof the Seller
may be placed to that person and shall include the telephone number to
which the calls may be placed and the signature of that person or
2 the Seller has an Established Business Relationship with such person and
that person has not previously stated that he or she does not wish to
receive Outbound Telephone Calls made by or on behalf of the Seller
B Initiating any Outbound Telephone Call to a person when that person has
previously stated that he or she does not wish to receive an Outbound Telephone
Call made by or on behalf of Pacific Telecom Defendants or the Seller
C Initiating any Outbound Telephone Call where Pacific Telecom Defondants their
Representatives or their clients fail to transmit or cause to be transmitted to any
Caller Identification Service in use by a recipient of a Telemarketing call either
(i) the telephone number and name of the Telemarketer making the call or (ii) the
Sellers name and customer service telephone number
D Initiating any outbound telephone call that delivers a prerecorded message to
induce the purchase ofany good or service unless prior to making any such call
the Seller has obtained from the recipient of the call an express agreement in
writing that
1 the Seller obtained only after a clear and conspicuous disclosure that the
purpose of the agreement is to authorize the seller to place prerecorded
calls to such person
Page 5 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 6 of 41
2 the Seller obtained without requiring directly or indirectly that the
agreement be executed as a condition ofpurchasing any good or service
3 evidences the willingness of tbe recipient of the call to receive calls tl1at
deliver prerecorded messages by or on behalf ofthe Seller and
4 includes such persons telephone number and signature and
E Violating the Telemarketing Sales Rule 16 CF R Part 3 J0 attached as Appendix
A
III TERMINATION OF NONCOMPLIANT CLIENTS
poundT S FURTIIER ORDERED that
A Pacific Telecom Defendants shall within thirty (30) days of the date ofentry of
this Order
1 Provide electronically or otherwise all existing clients (if any) with (i) a
copy of this Order and (ii) a written notice stating that the use ofPacific
Telecom Defendants services in connection with telephone calls that do
not comply with this Order will result in immediate termination of
services and
2 Obtain from each such client an electronic acknowledgment or other
signed and dated statement acknowledging receipt of this Order and the
written notice concerning immediate termination of services
B Prior to commencing services for any prospective clients Pacific Telecom
Defendants shall
1 Provide e]ectronical ly or otherwise each such prospective client with (i)
a copy of this Order and (ii) a middotwritten notice stating that the use ofPacific
Telecom Defendants services to cause the initiation of telephone calls that
Page 6 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 7 of 41
do not comply with this Order will result in immediate termination of
services and
2 Obtain from each such prospective client an electronic acknowledgment or
other signed and dated statement acknowledging receipt ofthis Order and
the written notice concerning immediate termination of services
C Pacific Telecom Defendants shall
1 Terminate services to any subscriber immediately upon discovering that a
subscriber has used the services of Pacific Telecom Defendants or their
Representatives to initiate or cause the initiation of telephone calls that do
not comply with this Order and
2 Refuse to provide services to any prospective subscriber if such services
would assist or support the initiation of telephone calls that do not comply
with this Order
IV MONETARY JUDGMENT FOR CIVIL PENAL TY AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that
A Judgment in the amount ofOne Million Three Hundred Fifty-Four Thousand
Dollars ($1 35400000) is entered in favor ofPlaintiffs against Pacific Telecom
Defendants jointly and severally as a civ ii penalty
B Pacific Telecom Defendants are ordered to pay to Plaintiffs by making payment
to the Treasurer ofthe United States Two Thousand Five Hundred Dollars
($250000) Such payment must be made within ten (10) days of entry of this
Order by electronic fund transfer in accordance with instructions previously
provided by a representative ofP laintiffs Upon such payment the remainder of
Page 7 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 8 of 41
the judgment is suspended subject to the Subsections below
C The Commissions and Plainti ffs agreement to the suspension ofpart of the
judgment is expressly premised upon the truthfulness accuracy and completeness
of Pacific Telecom Defendants sworn financial statements and related documents
(collectively financial representations) submitted to the Commission namely
1 the Financial Statements oflndividual Defendant Fred Accuardi signed on
March 14 2014 and September 20 2015 including the attachments
2 the Financial Statements of Corporate Defendant Pacific Telecom
Communications Group signed by Fred Accuardi on March 14 2014 aud
September 21 2015 including the attachments
3 the Financial Statement of Corporate Defendant lnternational Telephone
Corporation signed by Fred Accuardi on March 14 2014 inc]uding the
al1achments
4 the Financial Statement of Corporate Defendant International Telephone
LLC s igned by Fred Accuardi on March 14 20 l 4 including the
attachments
5 the Financial Statements of Corporate Defendant Telephone Management
Corporation signed by Fred Accuardi on March 22 2014 and September
22 201 5 including the attachments
6 all documents attached to correspondence to Commission staff from Jamie
Heim dated March 4 2014 March 7 2014 March 10 2014 March 14
20 14 March 24 2014 and September 28 2015
7 all documents attached to correspondence to Commission staff from Fred
Page 8 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 9 of 41
Accuardi dated September 28 2015
8 correspondence to Commission staff from Individual Defendant Accuardi
dated April J I 2014 and
9 e-mail correspondence to Commission staff from the Pacific Telecom
Defendants counsel dated June 6 2014 and November 6 2015
D The Sllspension of the judgment will be lifted as to any Pacific Telecom
Defendant if upon motion by the Commission or Plaintiffs the Court finds that
tbe Pacific Telecom Defendant failed to disclose any material asset materiaUy
m isstated the value of any asset or made any other material misstatement or
omission in the financial representations identified above
E If the suspension of the judgment is lifted the j udgment becomes immediately
due as to that Pacific Telecom Defendant in the amount specified in Subsection A
above (which the palties stipulate only for purposes of111is Section represeots the
amount of the c ivil penalty for the vio lations alleged in the First Amended
Compaint)t less any payment previously made pursuant to this Sect ion plus
interest computed from the date of entry of this Order
V ADDITIONAL MONETARY PROVISIONS
JT IS FURTHER ORDERED that
A Pacific Telecom Defendants relinquish dominion and all legal and equitable right
title and interest in all assets transferred pursuant to this Order and may not seek
the retum of any assets
B The facts alleged in the First Amended Complaint will be taken as true without
further proof in any subsequent civil litigation by or on behalfof the
Page 9 of 23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 2 of 41
FINDINGS
l This Court has jurisdction over this matter
2 The First Amended Complaint charges that Pacific Telecom Defendants engaged in
deceptive acts or practices in violation of Section 5(a) of the FTC Act 15 USC sect 45(a) and the
FTCs Telemarketing Sales Rule (the TSR) as amended 16 CFR Part 310 by assisting and
facilitating numerous telemarketers who made millions ofprerecorded robocalls in violation of
Section 310-4 of the TSR
3 Pacific Telecom Defendants neither admit nor deny any of the allegations in the First
Amended Complaint except as specifically stated in this Order Only for purposes of this action
Pacific Telecom Defendants admit the facts necessary to establish jurisdiction
4 Pacific Telecom Defendants waive any claim that they may have under the Equal Access
to Justice Act 28 USC sect 2412 concerning the prosecution of this action through the date of
this Order and agree to bear their own costs and attorney fees Pacific Te)ecom Defendants
waive and release any claims that they may have against Plaintiffs the Commission and their
agents that relate to this action
5 Pacific Telecom Defendants and Plaintiffs waive all rights to appeal or otherwise
challenge or contest the validity of this Order
DEFINITIONS
For the purpose of this Order the following definitions apply
A Assisting Other Persons means providing any of the following goods or services to
another person while knowing or consciously avoiding knowing that the person receiv ing
assistance is engaged in an act or practice that is prohibited by this Order (i) serving as an
officer director or consultant (ii) providing or arranging for access to services that remit to
Page 2 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 3 of 41
telemarketers or sellers the fees generated by caller identification inquiries (iii) providing or
arranging for access lo services that allow users lo assign or change the name of the calling party
displayed by caller identification services or (iv) providing any other substantial help or
assistance
B Caller Identification Service means a service that allows a telephone subscriber to
have the telephone number and where available name of the calling party transmitted
contemporaneously with the telephone call and displayed on a device in or connected to the
subscribers telephone
C Corporate Defendants means Pacific Telecom Communications Group lnternational
Telephone Corporation International Telephone LLC TM Caller ID LLC Telephone
Management Cotporation and their successors and assigns
D Established Business Relationship means a relationship between a Seller and a
person based on (a) the persons purchase rental or 1ease of the Sellers goods or services or a
financial transaction benveen the Seller and person vithin the eighteen months immediately
preceding the date of the Telemarketing call or (b) the persons inquiry or application regarding
a product or service offered by the Seller within the three months immediately preceding the
date of a Telemarketing call
E Individual Defendant means Fred Accuardi
F National Do Not Call Registry means the National Do Not Call Registry which is the
do-not-call registry maintained by the Commission pursuant to 16 CFR sect 3104(b )(1 )(iii)(B)
G Outbound Telephone Call means a telephone call initiated by a telemarketer to induce
the purchase of goods or services or to solicit a charitable contribution
H Representatives means Corporate Defendants officers agents servants employees
Page 3 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 011272017 Page 4 of 41
attorneys and those persons in active concert or pa1ticipation with them who receive actual
notice of this Order by personal service or otherwise
I Seller means any person who in connection with a telemarketing transaction provides
offers to provide or arranges for others to provide goods or services to the customer in exchange
for consideration whether or not such person is under the jurisdiction of the Commission
J Telemarketer means any person who in connection with telemarketing initiates or
receives telephone calls to or from a customer or donor
K Telemarketing means any pian program or campaign which is conducted to induce
the purchase of goods or services by use ofone or more telephones and which involves a
telephone call
ORDER
I PERMANENT BAN ON ROBOCALLS
IT IS ORDERED that Pacific Telecom Defendants whether acting directly or through an
inte1mediary are permanently restrained and enjoined from initiating causing others to initiate
or Assisting Others Persons initiating any Outbound Telephone Call that delivers a prerecorded
message
II PROHIBITION AGAINST ILLEGAL TELEMARKETING PRACTICES
IT IS FURTHER ORDERED that Pacific Telecom Defendants and their Representatives
whether acting directly or indirectly in connection with Telemarketing are permanently
restrained and enjoined from engaging in causing others to engage in or Assisting Other
Persons engaging in the fo llowing practices
A Initiating an Outbound TeJephone CaII to any person whose telephone number is
on the National Do Not Call Registry unless Pacific Telecom Defendants prove
that
Page 4 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 5 of 41
I the Seller has obtained the express agreement in writing of such person to
place calls to that person Such written agreement shalJ clearly evidence
such persons authorization that calls made by or on behalfof the Seller
may be placed to that person and shall include the telephone number to
which the calls may be placed and the signature of that person or
2 the Seller has an Established Business Relationship with such person and
that person has not previously stated that he or she does not wish to
receive Outbound Telephone Calls made by or on behalf of the Seller
B Initiating any Outbound Telephone Call to a person when that person has
previously stated that he or she does not wish to receive an Outbound Telephone
Call made by or on behalf of Pacific Telecom Defendants or the Seller
C Initiating any Outbound Telephone Call where Pacific Telecom Defondants their
Representatives or their clients fail to transmit or cause to be transmitted to any
Caller Identification Service in use by a recipient of a Telemarketing call either
(i) the telephone number and name of the Telemarketer making the call or (ii) the
Sellers name and customer service telephone number
D Initiating any outbound telephone call that delivers a prerecorded message to
induce the purchase ofany good or service unless prior to making any such call
the Seller has obtained from the recipient of the call an express agreement in
writing that
1 the Seller obtained only after a clear and conspicuous disclosure that the
purpose of the agreement is to authorize the seller to place prerecorded
calls to such person
Page 5 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 6 of 41
2 the Seller obtained without requiring directly or indirectly that the
agreement be executed as a condition ofpurchasing any good or service
3 evidences the willingness of tbe recipient of the call to receive calls tl1at
deliver prerecorded messages by or on behalf ofthe Seller and
4 includes such persons telephone number and signature and
E Violating the Telemarketing Sales Rule 16 CF R Part 3 J0 attached as Appendix
A
III TERMINATION OF NONCOMPLIANT CLIENTS
poundT S FURTIIER ORDERED that
A Pacific Telecom Defendants shall within thirty (30) days of the date ofentry of
this Order
1 Provide electronically or otherwise all existing clients (if any) with (i) a
copy of this Order and (ii) a written notice stating that the use ofPacific
Telecom Defendants services in connection with telephone calls that do
not comply with this Order will result in immediate termination of
services and
2 Obtain from each such client an electronic acknowledgment or other
signed and dated statement acknowledging receipt of this Order and the
written notice concerning immediate termination of services
B Prior to commencing services for any prospective clients Pacific Telecom
Defendants shall
1 Provide e]ectronical ly or otherwise each such prospective client with (i)
a copy of this Order and (ii) a middotwritten notice stating that the use ofPacific
Telecom Defendants services to cause the initiation of telephone calls that
Page 6 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 7 of 41
do not comply with this Order will result in immediate termination of
services and
2 Obtain from each such prospective client an electronic acknowledgment or
other signed and dated statement acknowledging receipt ofthis Order and
the written notice concerning immediate termination of services
C Pacific Telecom Defendants shall
1 Terminate services to any subscriber immediately upon discovering that a
subscriber has used the services of Pacific Telecom Defendants or their
Representatives to initiate or cause the initiation of telephone calls that do
not comply with this Order and
2 Refuse to provide services to any prospective subscriber if such services
would assist or support the initiation of telephone calls that do not comply
with this Order
IV MONETARY JUDGMENT FOR CIVIL PENAL TY AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that
A Judgment in the amount ofOne Million Three Hundred Fifty-Four Thousand
Dollars ($1 35400000) is entered in favor ofPlaintiffs against Pacific Telecom
Defendants jointly and severally as a civ ii penalty
B Pacific Telecom Defendants are ordered to pay to Plaintiffs by making payment
to the Treasurer ofthe United States Two Thousand Five Hundred Dollars
($250000) Such payment must be made within ten (10) days of entry of this
Order by electronic fund transfer in accordance with instructions previously
provided by a representative ofP laintiffs Upon such payment the remainder of
Page 7 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 8 of 41
the judgment is suspended subject to the Subsections below
C The Commissions and Plainti ffs agreement to the suspension ofpart of the
judgment is expressly premised upon the truthfulness accuracy and completeness
of Pacific Telecom Defendants sworn financial statements and related documents
(collectively financial representations) submitted to the Commission namely
1 the Financial Statements oflndividual Defendant Fred Accuardi signed on
March 14 2014 and September 20 2015 including the attachments
2 the Financial Statements of Corporate Defendant Pacific Telecom
Communications Group signed by Fred Accuardi on March 14 2014 aud
September 21 2015 including the attachments
3 the Financial Statement of Corporate Defendant lnternational Telephone
Corporation signed by Fred Accuardi on March 14 2014 inc]uding the
al1achments
4 the Financial Statement of Corporate Defendant International Telephone
LLC s igned by Fred Accuardi on March 14 20 l 4 including the
attachments
5 the Financial Statements of Corporate Defendant Telephone Management
Corporation signed by Fred Accuardi on March 22 2014 and September
22 201 5 including the attachments
6 all documents attached to correspondence to Commission staff from Jamie
Heim dated March 4 2014 March 7 2014 March 10 2014 March 14
20 14 March 24 2014 and September 28 2015
7 all documents attached to correspondence to Commission staff from Fred
Page 8 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 9 of 41
Accuardi dated September 28 2015
8 correspondence to Commission staff from Individual Defendant Accuardi
dated April J I 2014 and
9 e-mail correspondence to Commission staff from the Pacific Telecom
Defendants counsel dated June 6 2014 and November 6 2015
D The Sllspension of the judgment will be lifted as to any Pacific Telecom
Defendant if upon motion by the Commission or Plaintiffs the Court finds that
tbe Pacific Telecom Defendant failed to disclose any material asset materiaUy
m isstated the value of any asset or made any other material misstatement or
omission in the financial representations identified above
E If the suspension of the judgment is lifted the j udgment becomes immediately
due as to that Pacific Telecom Defendant in the amount specified in Subsection A
above (which the palties stipulate only for purposes of111is Section represeots the
amount of the c ivil penalty for the vio lations alleged in the First Amended
Compaint)t less any payment previously made pursuant to this Sect ion plus
interest computed from the date of entry of this Order
V ADDITIONAL MONETARY PROVISIONS
JT IS FURTHER ORDERED that
A Pacific Telecom Defendants relinquish dominion and all legal and equitable right
title and interest in all assets transferred pursuant to this Order and may not seek
the retum of any assets
B The facts alleged in the First Amended Complaint will be taken as true without
further proof in any subsequent civil litigation by or on behalfof the
Page 9 of 23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 3 of 41
telemarketers or sellers the fees generated by caller identification inquiries (iii) providing or
arranging for access lo services that allow users lo assign or change the name of the calling party
displayed by caller identification services or (iv) providing any other substantial help or
assistance
B Caller Identification Service means a service that allows a telephone subscriber to
have the telephone number and where available name of the calling party transmitted
contemporaneously with the telephone call and displayed on a device in or connected to the
subscribers telephone
C Corporate Defendants means Pacific Telecom Communications Group lnternational
Telephone Corporation International Telephone LLC TM Caller ID LLC Telephone
Management Cotporation and their successors and assigns
D Established Business Relationship means a relationship between a Seller and a
person based on (a) the persons purchase rental or 1ease of the Sellers goods or services or a
financial transaction benveen the Seller and person vithin the eighteen months immediately
preceding the date of the Telemarketing call or (b) the persons inquiry or application regarding
a product or service offered by the Seller within the three months immediately preceding the
date of a Telemarketing call
E Individual Defendant means Fred Accuardi
F National Do Not Call Registry means the National Do Not Call Registry which is the
do-not-call registry maintained by the Commission pursuant to 16 CFR sect 3104(b )(1 )(iii)(B)
G Outbound Telephone Call means a telephone call initiated by a telemarketer to induce
the purchase of goods or services or to solicit a charitable contribution
H Representatives means Corporate Defendants officers agents servants employees
Page 3 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 011272017 Page 4 of 41
attorneys and those persons in active concert or pa1ticipation with them who receive actual
notice of this Order by personal service or otherwise
I Seller means any person who in connection with a telemarketing transaction provides
offers to provide or arranges for others to provide goods or services to the customer in exchange
for consideration whether or not such person is under the jurisdiction of the Commission
J Telemarketer means any person who in connection with telemarketing initiates or
receives telephone calls to or from a customer or donor
K Telemarketing means any pian program or campaign which is conducted to induce
the purchase of goods or services by use ofone or more telephones and which involves a
telephone call
ORDER
I PERMANENT BAN ON ROBOCALLS
IT IS ORDERED that Pacific Telecom Defendants whether acting directly or through an
inte1mediary are permanently restrained and enjoined from initiating causing others to initiate
or Assisting Others Persons initiating any Outbound Telephone Call that delivers a prerecorded
message
II PROHIBITION AGAINST ILLEGAL TELEMARKETING PRACTICES
IT IS FURTHER ORDERED that Pacific Telecom Defendants and their Representatives
whether acting directly or indirectly in connection with Telemarketing are permanently
restrained and enjoined from engaging in causing others to engage in or Assisting Other
Persons engaging in the fo llowing practices
A Initiating an Outbound TeJephone CaII to any person whose telephone number is
on the National Do Not Call Registry unless Pacific Telecom Defendants prove
that
Page 4 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 5 of 41
I the Seller has obtained the express agreement in writing of such person to
place calls to that person Such written agreement shalJ clearly evidence
such persons authorization that calls made by or on behalfof the Seller
may be placed to that person and shall include the telephone number to
which the calls may be placed and the signature of that person or
2 the Seller has an Established Business Relationship with such person and
that person has not previously stated that he or she does not wish to
receive Outbound Telephone Calls made by or on behalf of the Seller
B Initiating any Outbound Telephone Call to a person when that person has
previously stated that he or she does not wish to receive an Outbound Telephone
Call made by or on behalf of Pacific Telecom Defendants or the Seller
C Initiating any Outbound Telephone Call where Pacific Telecom Defondants their
Representatives or their clients fail to transmit or cause to be transmitted to any
Caller Identification Service in use by a recipient of a Telemarketing call either
(i) the telephone number and name of the Telemarketer making the call or (ii) the
Sellers name and customer service telephone number
D Initiating any outbound telephone call that delivers a prerecorded message to
induce the purchase ofany good or service unless prior to making any such call
the Seller has obtained from the recipient of the call an express agreement in
writing that
1 the Seller obtained only after a clear and conspicuous disclosure that the
purpose of the agreement is to authorize the seller to place prerecorded
calls to such person
Page 5 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 6 of 41
2 the Seller obtained without requiring directly or indirectly that the
agreement be executed as a condition ofpurchasing any good or service
3 evidences the willingness of tbe recipient of the call to receive calls tl1at
deliver prerecorded messages by or on behalf ofthe Seller and
4 includes such persons telephone number and signature and
E Violating the Telemarketing Sales Rule 16 CF R Part 3 J0 attached as Appendix
A
III TERMINATION OF NONCOMPLIANT CLIENTS
poundT S FURTIIER ORDERED that
A Pacific Telecom Defendants shall within thirty (30) days of the date ofentry of
this Order
1 Provide electronically or otherwise all existing clients (if any) with (i) a
copy of this Order and (ii) a written notice stating that the use ofPacific
Telecom Defendants services in connection with telephone calls that do
not comply with this Order will result in immediate termination of
services and
2 Obtain from each such client an electronic acknowledgment or other
signed and dated statement acknowledging receipt of this Order and the
written notice concerning immediate termination of services
B Prior to commencing services for any prospective clients Pacific Telecom
Defendants shall
1 Provide e]ectronical ly or otherwise each such prospective client with (i)
a copy of this Order and (ii) a middotwritten notice stating that the use ofPacific
Telecom Defendants services to cause the initiation of telephone calls that
Page 6 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 7 of 41
do not comply with this Order will result in immediate termination of
services and
2 Obtain from each such prospective client an electronic acknowledgment or
other signed and dated statement acknowledging receipt ofthis Order and
the written notice concerning immediate termination of services
C Pacific Telecom Defendants shall
1 Terminate services to any subscriber immediately upon discovering that a
subscriber has used the services of Pacific Telecom Defendants or their
Representatives to initiate or cause the initiation of telephone calls that do
not comply with this Order and
2 Refuse to provide services to any prospective subscriber if such services
would assist or support the initiation of telephone calls that do not comply
with this Order
IV MONETARY JUDGMENT FOR CIVIL PENAL TY AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that
A Judgment in the amount ofOne Million Three Hundred Fifty-Four Thousand
Dollars ($1 35400000) is entered in favor ofPlaintiffs against Pacific Telecom
Defendants jointly and severally as a civ ii penalty
B Pacific Telecom Defendants are ordered to pay to Plaintiffs by making payment
to the Treasurer ofthe United States Two Thousand Five Hundred Dollars
($250000) Such payment must be made within ten (10) days of entry of this
Order by electronic fund transfer in accordance with instructions previously
provided by a representative ofP laintiffs Upon such payment the remainder of
Page 7 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 8 of 41
the judgment is suspended subject to the Subsections below
C The Commissions and Plainti ffs agreement to the suspension ofpart of the
judgment is expressly premised upon the truthfulness accuracy and completeness
of Pacific Telecom Defendants sworn financial statements and related documents
(collectively financial representations) submitted to the Commission namely
1 the Financial Statements oflndividual Defendant Fred Accuardi signed on
March 14 2014 and September 20 2015 including the attachments
2 the Financial Statements of Corporate Defendant Pacific Telecom
Communications Group signed by Fred Accuardi on March 14 2014 aud
September 21 2015 including the attachments
3 the Financial Statement of Corporate Defendant lnternational Telephone
Corporation signed by Fred Accuardi on March 14 2014 inc]uding the
al1achments
4 the Financial Statement of Corporate Defendant International Telephone
LLC s igned by Fred Accuardi on March 14 20 l 4 including the
attachments
5 the Financial Statements of Corporate Defendant Telephone Management
Corporation signed by Fred Accuardi on March 22 2014 and September
22 201 5 including the attachments
6 all documents attached to correspondence to Commission staff from Jamie
Heim dated March 4 2014 March 7 2014 March 10 2014 March 14
20 14 March 24 2014 and September 28 2015
7 all documents attached to correspondence to Commission staff from Fred
Page 8 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 9 of 41
Accuardi dated September 28 2015
8 correspondence to Commission staff from Individual Defendant Accuardi
dated April J I 2014 and
9 e-mail correspondence to Commission staff from the Pacific Telecom
Defendants counsel dated June 6 2014 and November 6 2015
D The Sllspension of the judgment will be lifted as to any Pacific Telecom
Defendant if upon motion by the Commission or Plaintiffs the Court finds that
tbe Pacific Telecom Defendant failed to disclose any material asset materiaUy
m isstated the value of any asset or made any other material misstatement or
omission in the financial representations identified above
E If the suspension of the judgment is lifted the j udgment becomes immediately
due as to that Pacific Telecom Defendant in the amount specified in Subsection A
above (which the palties stipulate only for purposes of111is Section represeots the
amount of the c ivil penalty for the vio lations alleged in the First Amended
Compaint)t less any payment previously made pursuant to this Sect ion plus
interest computed from the date of entry of this Order
V ADDITIONAL MONETARY PROVISIONS
JT IS FURTHER ORDERED that
A Pacific Telecom Defendants relinquish dominion and all legal and equitable right
title and interest in all assets transferred pursuant to this Order and may not seek
the retum of any assets
B The facts alleged in the First Amended Complaint will be taken as true without
further proof in any subsequent civil litigation by or on behalfof the
Page 9 of 23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 011272017 Page 4 of 41
attorneys and those persons in active concert or pa1ticipation with them who receive actual
notice of this Order by personal service or otherwise
I Seller means any person who in connection with a telemarketing transaction provides
offers to provide or arranges for others to provide goods or services to the customer in exchange
for consideration whether or not such person is under the jurisdiction of the Commission
J Telemarketer means any person who in connection with telemarketing initiates or
receives telephone calls to or from a customer or donor
K Telemarketing means any pian program or campaign which is conducted to induce
the purchase of goods or services by use ofone or more telephones and which involves a
telephone call
ORDER
I PERMANENT BAN ON ROBOCALLS
IT IS ORDERED that Pacific Telecom Defendants whether acting directly or through an
inte1mediary are permanently restrained and enjoined from initiating causing others to initiate
or Assisting Others Persons initiating any Outbound Telephone Call that delivers a prerecorded
message
II PROHIBITION AGAINST ILLEGAL TELEMARKETING PRACTICES
IT IS FURTHER ORDERED that Pacific Telecom Defendants and their Representatives
whether acting directly or indirectly in connection with Telemarketing are permanently
restrained and enjoined from engaging in causing others to engage in or Assisting Other
Persons engaging in the fo llowing practices
A Initiating an Outbound TeJephone CaII to any person whose telephone number is
on the National Do Not Call Registry unless Pacific Telecom Defendants prove
that
Page 4 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 5 of 41
I the Seller has obtained the express agreement in writing of such person to
place calls to that person Such written agreement shalJ clearly evidence
such persons authorization that calls made by or on behalfof the Seller
may be placed to that person and shall include the telephone number to
which the calls may be placed and the signature of that person or
2 the Seller has an Established Business Relationship with such person and
that person has not previously stated that he or she does not wish to
receive Outbound Telephone Calls made by or on behalf of the Seller
B Initiating any Outbound Telephone Call to a person when that person has
previously stated that he or she does not wish to receive an Outbound Telephone
Call made by or on behalf of Pacific Telecom Defendants or the Seller
C Initiating any Outbound Telephone Call where Pacific Telecom Defondants their
Representatives or their clients fail to transmit or cause to be transmitted to any
Caller Identification Service in use by a recipient of a Telemarketing call either
(i) the telephone number and name of the Telemarketer making the call or (ii) the
Sellers name and customer service telephone number
D Initiating any outbound telephone call that delivers a prerecorded message to
induce the purchase ofany good or service unless prior to making any such call
the Seller has obtained from the recipient of the call an express agreement in
writing that
1 the Seller obtained only after a clear and conspicuous disclosure that the
purpose of the agreement is to authorize the seller to place prerecorded
calls to such person
Page 5 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 6 of 41
2 the Seller obtained without requiring directly or indirectly that the
agreement be executed as a condition ofpurchasing any good or service
3 evidences the willingness of tbe recipient of the call to receive calls tl1at
deliver prerecorded messages by or on behalf ofthe Seller and
4 includes such persons telephone number and signature and
E Violating the Telemarketing Sales Rule 16 CF R Part 3 J0 attached as Appendix
A
III TERMINATION OF NONCOMPLIANT CLIENTS
poundT S FURTIIER ORDERED that
A Pacific Telecom Defendants shall within thirty (30) days of the date ofentry of
this Order
1 Provide electronically or otherwise all existing clients (if any) with (i) a
copy of this Order and (ii) a written notice stating that the use ofPacific
Telecom Defendants services in connection with telephone calls that do
not comply with this Order will result in immediate termination of
services and
2 Obtain from each such client an electronic acknowledgment or other
signed and dated statement acknowledging receipt of this Order and the
written notice concerning immediate termination of services
B Prior to commencing services for any prospective clients Pacific Telecom
Defendants shall
1 Provide e]ectronical ly or otherwise each such prospective client with (i)
a copy of this Order and (ii) a middotwritten notice stating that the use ofPacific
Telecom Defendants services to cause the initiation of telephone calls that
Page 6 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 7 of 41
do not comply with this Order will result in immediate termination of
services and
2 Obtain from each such prospective client an electronic acknowledgment or
other signed and dated statement acknowledging receipt ofthis Order and
the written notice concerning immediate termination of services
C Pacific Telecom Defendants shall
1 Terminate services to any subscriber immediately upon discovering that a
subscriber has used the services of Pacific Telecom Defendants or their
Representatives to initiate or cause the initiation of telephone calls that do
not comply with this Order and
2 Refuse to provide services to any prospective subscriber if such services
would assist or support the initiation of telephone calls that do not comply
with this Order
IV MONETARY JUDGMENT FOR CIVIL PENAL TY AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that
A Judgment in the amount ofOne Million Three Hundred Fifty-Four Thousand
Dollars ($1 35400000) is entered in favor ofPlaintiffs against Pacific Telecom
Defendants jointly and severally as a civ ii penalty
B Pacific Telecom Defendants are ordered to pay to Plaintiffs by making payment
to the Treasurer ofthe United States Two Thousand Five Hundred Dollars
($250000) Such payment must be made within ten (10) days of entry of this
Order by electronic fund transfer in accordance with instructions previously
provided by a representative ofP laintiffs Upon such payment the remainder of
Page 7 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 8 of 41
the judgment is suspended subject to the Subsections below
C The Commissions and Plainti ffs agreement to the suspension ofpart of the
judgment is expressly premised upon the truthfulness accuracy and completeness
of Pacific Telecom Defendants sworn financial statements and related documents
(collectively financial representations) submitted to the Commission namely
1 the Financial Statements oflndividual Defendant Fred Accuardi signed on
March 14 2014 and September 20 2015 including the attachments
2 the Financial Statements of Corporate Defendant Pacific Telecom
Communications Group signed by Fred Accuardi on March 14 2014 aud
September 21 2015 including the attachments
3 the Financial Statement of Corporate Defendant lnternational Telephone
Corporation signed by Fred Accuardi on March 14 2014 inc]uding the
al1achments
4 the Financial Statement of Corporate Defendant International Telephone
LLC s igned by Fred Accuardi on March 14 20 l 4 including the
attachments
5 the Financial Statements of Corporate Defendant Telephone Management
Corporation signed by Fred Accuardi on March 22 2014 and September
22 201 5 including the attachments
6 all documents attached to correspondence to Commission staff from Jamie
Heim dated March 4 2014 March 7 2014 March 10 2014 March 14
20 14 March 24 2014 and September 28 2015
7 all documents attached to correspondence to Commission staff from Fred
Page 8 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 9 of 41
Accuardi dated September 28 2015
8 correspondence to Commission staff from Individual Defendant Accuardi
dated April J I 2014 and
9 e-mail correspondence to Commission staff from the Pacific Telecom
Defendants counsel dated June 6 2014 and November 6 2015
D The Sllspension of the judgment will be lifted as to any Pacific Telecom
Defendant if upon motion by the Commission or Plaintiffs the Court finds that
tbe Pacific Telecom Defendant failed to disclose any material asset materiaUy
m isstated the value of any asset or made any other material misstatement or
omission in the financial representations identified above
E If the suspension of the judgment is lifted the j udgment becomes immediately
due as to that Pacific Telecom Defendant in the amount specified in Subsection A
above (which the palties stipulate only for purposes of111is Section represeots the
amount of the c ivil penalty for the vio lations alleged in the First Amended
Compaint)t less any payment previously made pursuant to this Sect ion plus
interest computed from the date of entry of this Order
V ADDITIONAL MONETARY PROVISIONS
JT IS FURTHER ORDERED that
A Pacific Telecom Defendants relinquish dominion and all legal and equitable right
title and interest in all assets transferred pursuant to this Order and may not seek
the retum of any assets
B The facts alleged in the First Amended Complaint will be taken as true without
further proof in any subsequent civil litigation by or on behalfof the
Page 9 of 23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 5 of 41
I the Seller has obtained the express agreement in writing of such person to
place calls to that person Such written agreement shalJ clearly evidence
such persons authorization that calls made by or on behalfof the Seller
may be placed to that person and shall include the telephone number to
which the calls may be placed and the signature of that person or
2 the Seller has an Established Business Relationship with such person and
that person has not previously stated that he or she does not wish to
receive Outbound Telephone Calls made by or on behalf of the Seller
B Initiating any Outbound Telephone Call to a person when that person has
previously stated that he or she does not wish to receive an Outbound Telephone
Call made by or on behalf of Pacific Telecom Defendants or the Seller
C Initiating any Outbound Telephone Call where Pacific Telecom Defondants their
Representatives or their clients fail to transmit or cause to be transmitted to any
Caller Identification Service in use by a recipient of a Telemarketing call either
(i) the telephone number and name of the Telemarketer making the call or (ii) the
Sellers name and customer service telephone number
D Initiating any outbound telephone call that delivers a prerecorded message to
induce the purchase ofany good or service unless prior to making any such call
the Seller has obtained from the recipient of the call an express agreement in
writing that
1 the Seller obtained only after a clear and conspicuous disclosure that the
purpose of the agreement is to authorize the seller to place prerecorded
calls to such person
Page 5 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 6 of 41
2 the Seller obtained without requiring directly or indirectly that the
agreement be executed as a condition ofpurchasing any good or service
3 evidences the willingness of tbe recipient of the call to receive calls tl1at
deliver prerecorded messages by or on behalf ofthe Seller and
4 includes such persons telephone number and signature and
E Violating the Telemarketing Sales Rule 16 CF R Part 3 J0 attached as Appendix
A
III TERMINATION OF NONCOMPLIANT CLIENTS
poundT S FURTIIER ORDERED that
A Pacific Telecom Defendants shall within thirty (30) days of the date ofentry of
this Order
1 Provide electronically or otherwise all existing clients (if any) with (i) a
copy of this Order and (ii) a written notice stating that the use ofPacific
Telecom Defendants services in connection with telephone calls that do
not comply with this Order will result in immediate termination of
services and
2 Obtain from each such client an electronic acknowledgment or other
signed and dated statement acknowledging receipt of this Order and the
written notice concerning immediate termination of services
B Prior to commencing services for any prospective clients Pacific Telecom
Defendants shall
1 Provide e]ectronical ly or otherwise each such prospective client with (i)
a copy of this Order and (ii) a middotwritten notice stating that the use ofPacific
Telecom Defendants services to cause the initiation of telephone calls that
Page 6 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 7 of 41
do not comply with this Order will result in immediate termination of
services and
2 Obtain from each such prospective client an electronic acknowledgment or
other signed and dated statement acknowledging receipt ofthis Order and
the written notice concerning immediate termination of services
C Pacific Telecom Defendants shall
1 Terminate services to any subscriber immediately upon discovering that a
subscriber has used the services of Pacific Telecom Defendants or their
Representatives to initiate or cause the initiation of telephone calls that do
not comply with this Order and
2 Refuse to provide services to any prospective subscriber if such services
would assist or support the initiation of telephone calls that do not comply
with this Order
IV MONETARY JUDGMENT FOR CIVIL PENAL TY AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that
A Judgment in the amount ofOne Million Three Hundred Fifty-Four Thousand
Dollars ($1 35400000) is entered in favor ofPlaintiffs against Pacific Telecom
Defendants jointly and severally as a civ ii penalty
B Pacific Telecom Defendants are ordered to pay to Plaintiffs by making payment
to the Treasurer ofthe United States Two Thousand Five Hundred Dollars
($250000) Such payment must be made within ten (10) days of entry of this
Order by electronic fund transfer in accordance with instructions previously
provided by a representative ofP laintiffs Upon such payment the remainder of
Page 7 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 8 of 41
the judgment is suspended subject to the Subsections below
C The Commissions and Plainti ffs agreement to the suspension ofpart of the
judgment is expressly premised upon the truthfulness accuracy and completeness
of Pacific Telecom Defendants sworn financial statements and related documents
(collectively financial representations) submitted to the Commission namely
1 the Financial Statements oflndividual Defendant Fred Accuardi signed on
March 14 2014 and September 20 2015 including the attachments
2 the Financial Statements of Corporate Defendant Pacific Telecom
Communications Group signed by Fred Accuardi on March 14 2014 aud
September 21 2015 including the attachments
3 the Financial Statement of Corporate Defendant lnternational Telephone
Corporation signed by Fred Accuardi on March 14 2014 inc]uding the
al1achments
4 the Financial Statement of Corporate Defendant International Telephone
LLC s igned by Fred Accuardi on March 14 20 l 4 including the
attachments
5 the Financial Statements of Corporate Defendant Telephone Management
Corporation signed by Fred Accuardi on March 22 2014 and September
22 201 5 including the attachments
6 all documents attached to correspondence to Commission staff from Jamie
Heim dated March 4 2014 March 7 2014 March 10 2014 March 14
20 14 March 24 2014 and September 28 2015
7 all documents attached to correspondence to Commission staff from Fred
Page 8 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 9 of 41
Accuardi dated September 28 2015
8 correspondence to Commission staff from Individual Defendant Accuardi
dated April J I 2014 and
9 e-mail correspondence to Commission staff from the Pacific Telecom
Defendants counsel dated June 6 2014 and November 6 2015
D The Sllspension of the judgment will be lifted as to any Pacific Telecom
Defendant if upon motion by the Commission or Plaintiffs the Court finds that
tbe Pacific Telecom Defendant failed to disclose any material asset materiaUy
m isstated the value of any asset or made any other material misstatement or
omission in the financial representations identified above
E If the suspension of the judgment is lifted the j udgment becomes immediately
due as to that Pacific Telecom Defendant in the amount specified in Subsection A
above (which the palties stipulate only for purposes of111is Section represeots the
amount of the c ivil penalty for the vio lations alleged in the First Amended
Compaint)t less any payment previously made pursuant to this Sect ion plus
interest computed from the date of entry of this Order
V ADDITIONAL MONETARY PROVISIONS
JT IS FURTHER ORDERED that
A Pacific Telecom Defendants relinquish dominion and all legal and equitable right
title and interest in all assets transferred pursuant to this Order and may not seek
the retum of any assets
B The facts alleged in the First Amended Complaint will be taken as true without
further proof in any subsequent civil litigation by or on behalfof the
Page 9 of 23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 6 of 41
2 the Seller obtained without requiring directly or indirectly that the
agreement be executed as a condition ofpurchasing any good or service
3 evidences the willingness of tbe recipient of the call to receive calls tl1at
deliver prerecorded messages by or on behalf ofthe Seller and
4 includes such persons telephone number and signature and
E Violating the Telemarketing Sales Rule 16 CF R Part 3 J0 attached as Appendix
A
III TERMINATION OF NONCOMPLIANT CLIENTS
poundT S FURTIIER ORDERED that
A Pacific Telecom Defendants shall within thirty (30) days of the date ofentry of
this Order
1 Provide electronically or otherwise all existing clients (if any) with (i) a
copy of this Order and (ii) a written notice stating that the use ofPacific
Telecom Defendants services in connection with telephone calls that do
not comply with this Order will result in immediate termination of
services and
2 Obtain from each such client an electronic acknowledgment or other
signed and dated statement acknowledging receipt of this Order and the
written notice concerning immediate termination of services
B Prior to commencing services for any prospective clients Pacific Telecom
Defendants shall
1 Provide e]ectronical ly or otherwise each such prospective client with (i)
a copy of this Order and (ii) a middotwritten notice stating that the use ofPacific
Telecom Defendants services to cause the initiation of telephone calls that
Page 6 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 7 of 41
do not comply with this Order will result in immediate termination of
services and
2 Obtain from each such prospective client an electronic acknowledgment or
other signed and dated statement acknowledging receipt ofthis Order and
the written notice concerning immediate termination of services
C Pacific Telecom Defendants shall
1 Terminate services to any subscriber immediately upon discovering that a
subscriber has used the services of Pacific Telecom Defendants or their
Representatives to initiate or cause the initiation of telephone calls that do
not comply with this Order and
2 Refuse to provide services to any prospective subscriber if such services
would assist or support the initiation of telephone calls that do not comply
with this Order
IV MONETARY JUDGMENT FOR CIVIL PENAL TY AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that
A Judgment in the amount ofOne Million Three Hundred Fifty-Four Thousand
Dollars ($1 35400000) is entered in favor ofPlaintiffs against Pacific Telecom
Defendants jointly and severally as a civ ii penalty
B Pacific Telecom Defendants are ordered to pay to Plaintiffs by making payment
to the Treasurer ofthe United States Two Thousand Five Hundred Dollars
($250000) Such payment must be made within ten (10) days of entry of this
Order by electronic fund transfer in accordance with instructions previously
provided by a representative ofP laintiffs Upon such payment the remainder of
Page 7 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 8 of 41
the judgment is suspended subject to the Subsections below
C The Commissions and Plainti ffs agreement to the suspension ofpart of the
judgment is expressly premised upon the truthfulness accuracy and completeness
of Pacific Telecom Defendants sworn financial statements and related documents
(collectively financial representations) submitted to the Commission namely
1 the Financial Statements oflndividual Defendant Fred Accuardi signed on
March 14 2014 and September 20 2015 including the attachments
2 the Financial Statements of Corporate Defendant Pacific Telecom
Communications Group signed by Fred Accuardi on March 14 2014 aud
September 21 2015 including the attachments
3 the Financial Statement of Corporate Defendant lnternational Telephone
Corporation signed by Fred Accuardi on March 14 2014 inc]uding the
al1achments
4 the Financial Statement of Corporate Defendant International Telephone
LLC s igned by Fred Accuardi on March 14 20 l 4 including the
attachments
5 the Financial Statements of Corporate Defendant Telephone Management
Corporation signed by Fred Accuardi on March 22 2014 and September
22 201 5 including the attachments
6 all documents attached to correspondence to Commission staff from Jamie
Heim dated March 4 2014 March 7 2014 March 10 2014 March 14
20 14 March 24 2014 and September 28 2015
7 all documents attached to correspondence to Commission staff from Fred
Page 8 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 9 of 41
Accuardi dated September 28 2015
8 correspondence to Commission staff from Individual Defendant Accuardi
dated April J I 2014 and
9 e-mail correspondence to Commission staff from the Pacific Telecom
Defendants counsel dated June 6 2014 and November 6 2015
D The Sllspension of the judgment will be lifted as to any Pacific Telecom
Defendant if upon motion by the Commission or Plaintiffs the Court finds that
tbe Pacific Telecom Defendant failed to disclose any material asset materiaUy
m isstated the value of any asset or made any other material misstatement or
omission in the financial representations identified above
E If the suspension of the judgment is lifted the j udgment becomes immediately
due as to that Pacific Telecom Defendant in the amount specified in Subsection A
above (which the palties stipulate only for purposes of111is Section represeots the
amount of the c ivil penalty for the vio lations alleged in the First Amended
Compaint)t less any payment previously made pursuant to this Sect ion plus
interest computed from the date of entry of this Order
V ADDITIONAL MONETARY PROVISIONS
JT IS FURTHER ORDERED that
A Pacific Telecom Defendants relinquish dominion and all legal and equitable right
title and interest in all assets transferred pursuant to this Order and may not seek
the retum of any assets
B The facts alleged in the First Amended Complaint will be taken as true without
further proof in any subsequent civil litigation by or on behalfof the
Page 9 of 23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 7 of 41
do not comply with this Order will result in immediate termination of
services and
2 Obtain from each such prospective client an electronic acknowledgment or
other signed and dated statement acknowledging receipt ofthis Order and
the written notice concerning immediate termination of services
C Pacific Telecom Defendants shall
1 Terminate services to any subscriber immediately upon discovering that a
subscriber has used the services of Pacific Telecom Defendants or their
Representatives to initiate or cause the initiation of telephone calls that do
not comply with this Order and
2 Refuse to provide services to any prospective subscriber if such services
would assist or support the initiation of telephone calls that do not comply
with this Order
IV MONETARY JUDGMENT FOR CIVIL PENAL TY AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that
A Judgment in the amount ofOne Million Three Hundred Fifty-Four Thousand
Dollars ($1 35400000) is entered in favor ofPlaintiffs against Pacific Telecom
Defendants jointly and severally as a civ ii penalty
B Pacific Telecom Defendants are ordered to pay to Plaintiffs by making payment
to the Treasurer ofthe United States Two Thousand Five Hundred Dollars
($250000) Such payment must be made within ten (10) days of entry of this
Order by electronic fund transfer in accordance with instructions previously
provided by a representative ofP laintiffs Upon such payment the remainder of
Page 7 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 8 of 41
the judgment is suspended subject to the Subsections below
C The Commissions and Plainti ffs agreement to the suspension ofpart of the
judgment is expressly premised upon the truthfulness accuracy and completeness
of Pacific Telecom Defendants sworn financial statements and related documents
(collectively financial representations) submitted to the Commission namely
1 the Financial Statements oflndividual Defendant Fred Accuardi signed on
March 14 2014 and September 20 2015 including the attachments
2 the Financial Statements of Corporate Defendant Pacific Telecom
Communications Group signed by Fred Accuardi on March 14 2014 aud
September 21 2015 including the attachments
3 the Financial Statement of Corporate Defendant lnternational Telephone
Corporation signed by Fred Accuardi on March 14 2014 inc]uding the
al1achments
4 the Financial Statement of Corporate Defendant International Telephone
LLC s igned by Fred Accuardi on March 14 20 l 4 including the
attachments
5 the Financial Statements of Corporate Defendant Telephone Management
Corporation signed by Fred Accuardi on March 22 2014 and September
22 201 5 including the attachments
6 all documents attached to correspondence to Commission staff from Jamie
Heim dated March 4 2014 March 7 2014 March 10 2014 March 14
20 14 March 24 2014 and September 28 2015
7 all documents attached to correspondence to Commission staff from Fred
Page 8 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 9 of 41
Accuardi dated September 28 2015
8 correspondence to Commission staff from Individual Defendant Accuardi
dated April J I 2014 and
9 e-mail correspondence to Commission staff from the Pacific Telecom
Defendants counsel dated June 6 2014 and November 6 2015
D The Sllspension of the judgment will be lifted as to any Pacific Telecom
Defendant if upon motion by the Commission or Plaintiffs the Court finds that
tbe Pacific Telecom Defendant failed to disclose any material asset materiaUy
m isstated the value of any asset or made any other material misstatement or
omission in the financial representations identified above
E If the suspension of the judgment is lifted the j udgment becomes immediately
due as to that Pacific Telecom Defendant in the amount specified in Subsection A
above (which the palties stipulate only for purposes of111is Section represeots the
amount of the c ivil penalty for the vio lations alleged in the First Amended
Compaint)t less any payment previously made pursuant to this Sect ion plus
interest computed from the date of entry of this Order
V ADDITIONAL MONETARY PROVISIONS
JT IS FURTHER ORDERED that
A Pacific Telecom Defendants relinquish dominion and all legal and equitable right
title and interest in all assets transferred pursuant to this Order and may not seek
the retum of any assets
B The facts alleged in the First Amended Complaint will be taken as true without
further proof in any subsequent civil litigation by or on behalfof the
Page 9 of 23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 8 of 41
the judgment is suspended subject to the Subsections below
C The Commissions and Plainti ffs agreement to the suspension ofpart of the
judgment is expressly premised upon the truthfulness accuracy and completeness
of Pacific Telecom Defendants sworn financial statements and related documents
(collectively financial representations) submitted to the Commission namely
1 the Financial Statements oflndividual Defendant Fred Accuardi signed on
March 14 2014 and September 20 2015 including the attachments
2 the Financial Statements of Corporate Defendant Pacific Telecom
Communications Group signed by Fred Accuardi on March 14 2014 aud
September 21 2015 including the attachments
3 the Financial Statement of Corporate Defendant lnternational Telephone
Corporation signed by Fred Accuardi on March 14 2014 inc]uding the
al1achments
4 the Financial Statement of Corporate Defendant International Telephone
LLC s igned by Fred Accuardi on March 14 20 l 4 including the
attachments
5 the Financial Statements of Corporate Defendant Telephone Management
Corporation signed by Fred Accuardi on March 22 2014 and September
22 201 5 including the attachments
6 all documents attached to correspondence to Commission staff from Jamie
Heim dated March 4 2014 March 7 2014 March 10 2014 March 14
20 14 March 24 2014 and September 28 2015
7 all documents attached to correspondence to Commission staff from Fred
Page 8 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 9 of 41
Accuardi dated September 28 2015
8 correspondence to Commission staff from Individual Defendant Accuardi
dated April J I 2014 and
9 e-mail correspondence to Commission staff from the Pacific Telecom
Defendants counsel dated June 6 2014 and November 6 2015
D The Sllspension of the judgment will be lifted as to any Pacific Telecom
Defendant if upon motion by the Commission or Plaintiffs the Court finds that
tbe Pacific Telecom Defendant failed to disclose any material asset materiaUy
m isstated the value of any asset or made any other material misstatement or
omission in the financial representations identified above
E If the suspension of the judgment is lifted the j udgment becomes immediately
due as to that Pacific Telecom Defendant in the amount specified in Subsection A
above (which the palties stipulate only for purposes of111is Section represeots the
amount of the c ivil penalty for the vio lations alleged in the First Amended
Compaint)t less any payment previously made pursuant to this Sect ion plus
interest computed from the date of entry of this Order
V ADDITIONAL MONETARY PROVISIONS
JT IS FURTHER ORDERED that
A Pacific Telecom Defendants relinquish dominion and all legal and equitable right
title and interest in all assets transferred pursuant to this Order and may not seek
the retum of any assets
B The facts alleged in the First Amended Complaint will be taken as true without
further proof in any subsequent civil litigation by or on behalfof the
Page 9 of 23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 9 of 41
Accuardi dated September 28 2015
8 correspondence to Commission staff from Individual Defendant Accuardi
dated April J I 2014 and
9 e-mail correspondence to Commission staff from the Pacific Telecom
Defendants counsel dated June 6 2014 and November 6 2015
D The Sllspension of the judgment will be lifted as to any Pacific Telecom
Defendant if upon motion by the Commission or Plaintiffs the Court finds that
tbe Pacific Telecom Defendant failed to disclose any material asset materiaUy
m isstated the value of any asset or made any other material misstatement or
omission in the financial representations identified above
E If the suspension of the judgment is lifted the j udgment becomes immediately
due as to that Pacific Telecom Defendant in the amount specified in Subsection A
above (which the palties stipulate only for purposes of111is Section represeots the
amount of the c ivil penalty for the vio lations alleged in the First Amended
Compaint)t less any payment previously made pursuant to this Sect ion plus
interest computed from the date of entry of this Order
V ADDITIONAL MONETARY PROVISIONS
JT IS FURTHER ORDERED that
A Pacific Telecom Defendants relinquish dominion and all legal and equitable right
title and interest in all assets transferred pursuant to this Order and may not seek
the retum of any assets
B The facts alleged in the First Amended Complaint will be taken as true without
further proof in any subsequent civil litigation by or on behalfof the
Page 9 of 23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 10 of 41
Commission including in a proceeding to enforce its rights to any payment or
monetary judgment pursuant to this Order
C Pacific Telecom Defendants agree that the judgment represents a civil penalty
owed to the government of the United States is not compensation for actual
pecuniary loss and therefore as to the Individual Defendant it is not subject to
discharge under the Bankruptcy Code pursuant to 11 USC sect 523(a)(7)
D Pacific Telecom Defendants acknowledge that their Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification Numbers) which
Pacific Telecom Defendants previously submitted to the Commission may be
used for collecting and reporting on any delinquent amount arising out of this
Order in accordance with 31USCsect7701
VI COOPERATION
IT IS FURTHER ORDERED that Pacific Telecom Defendants must fully cooperate with
representatives ofPlaintiffs and the Commission in this case and in any investigation related to
or associated with the transactions or the occurrences that are the subject of the First Amended
Complaint Pacific Telecom Defendants must provide truthful and complete information
evidence and testimony Individual Defendant must appear and Corporate Defendants must
cause their officers employees representatives or agents to appear for interviews discovery
hearings trials and any other proceedings that a Plaintiff or Commission representative may
reasonably request upon five (5) days written notice or other reasonable notice at such places
and times as a Plaintiff or Commission representative may designate without the service ofa
subpoena
Page 10of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 11of41
VII ORDER ACKtJOWLEDGMENTS
IT IS FURTHER ORDERED that Pacific Telecom Defendants obtain acknowledgrnenls
of receipt ofthis Order
A Each Pacific Telecom Defendant within seven (7) days of entry of this Order
must submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury
B For five (5) years after entry of this Order Individual Defendant for any busjness
engaged in Telemarketing or Assisting Other Persons that he individuaJly or
colJectively with any other Pacific Telecom Defendant is the majority owner or
controls directly or indirectly and each Corporate Defendant must deliver a copy
of this Order to (1) all principals officers directors and LLC managers and
members (2) all employees agents and representatives who participate in
conduct related to the subject matter of the Order and (3) any business entity
resulting from any change in structure as set forth in the Sectfon titled
Compliance Reporting Delivery must occur within seven (7) days of entry of this
Order for current personnel For all others delivery must occur before they
assume their responsibilities
C From each individual or entity to which a Pacific Telecom Defendant delivered a
copy of this Order that Pacific Telecom Defendant must obtain within thirty (30)
days a signed and dated acknowledgment ofreceipt of this Order
VIII COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Pacific Telecom Defendants make timely submissions
to the Commission
Page 11 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 12 of 41
A One year after entry of this Order each Pacific Telecom Defendant must submit a
compliance report sworn under penalty ofperjury
1 Each Pacific Telecom Defendant must (a) identify the primary physica l
postal and email address and telephone number a s designated points of
contact which representatives of the Commission and Plaintiffs may use
to communicate with that Pacific Telecom Defendant (b) identify all of
that Pacific Telecom Defendants businesses by all of their names
telephone numbers and physical postal email and Internet addresses (c)
describe the activities ofeach business including the goods and services
offered the means of advertising marketing and sales and the
involvement of any other P3cific Telecom Defondant (which Individual
Defendant must describe if he knows or should know due to his own
involvement) (d) describe in detail whether and how that Pacific Telecom
Defendant is in compliance with each Section of this Order and (e)
provide a copy ofeach Order Acknowledgment obtained pursuant to this
Order unless previously submitted to the Commission
2 Additionally Ind ividual Defendant must (a) identify all telephone
numbers and all physical postal email and Internet addresses including
aJI residences (b) identify all business activities including any business
for which he perfonns services whether as an employee or otherwise and
any entity in which he has any ownership interest and (c) describe in
detail his involvement in each such business including title role
responsibilities participation authority control and any ownership
Page 12 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 13 of 41
B For five (5) years after entry of this Order in the case of the Individual Defendant
and for five (5) years after entry of this Order in the case of the Corporate
Defendants the Pacific Telecom Defondants must submit a compliance notice
sworn w1derpenalty ofperjury within fourteen (14) days ofany change in the
following
1 Each Pacific Telecom Defendant must report any change in (a) any
designated point of contact or (b) the structure ofany Corporate
Defendant or any entity that such Pacific Telecom Defendant has any
ownership interest in or controls directly or indirectly that may affect
compliance obligations arising under this Order including creation
merger sale or dissolution ofthe entity or any subsidiary parent or
affiliate that engages in any acts or practices subject to this Order
2 Additionally Individual Defendant must report any change in (a) name
including aliases or fictitious name or residence address or (b) titJe or
role in any business that engages in Telemarketing or Assisting Other
Persons including any business for which he performs services whether as
an employee or otherwise and any entity in which he has any ownership
interest and identify the name physical address and any Internet address
of the business or entity
C Each Pacific Telecom Defendant must submit to the Commission notice of the
filing of any bankruptcy petition insolvency proceeding or similar proceeding by
or against such Pacific Telecom Defendant within fourteen (14) days of its filing
D Any submission to the Commission required by this Order to be swom under
Page 13 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 14 of 41
penalty ofperjury must be true and accurate and comply with 28 USC sect 1746
such as by concluding I declare under penalty ofperjury under the laws of the
United States of America that the foregoing is true and correct Executed on
_middot __and supplying the date signatorys full name title (if applicable) and
signature
E Unless otherwise directed by a Commission representative in writing a11
submissions to the Commission pursuant to this Order must be emailed to
DEbriefftcgov or sent by overnight courier (not the US Postal Service) to
Associate Director for Enforcement Bureau of Consumer Protection Federal
Trade Commission 600 Pennsylvania Avenue NW Washington DC 20580
The subject line must begin United States v Caribbean Cruise Line lnc et al
IX RECORDKEEPING
IT IS FURTHER ORDERED that for five (5) years a1ler entry of this Order in tbe case of
the Individual Defendant and for five (5) years after entry of this Order in the case of the
Corporate Defendants the Pacific Telecom Defendants must create certain records and retain
each such record for five (5) years Specifically Corporate Defendants in connection with
Telemarketing or Assisting Other Persons and Individual Defendant for any business engaged
in Te1emarketing or Assisting Other Persons that be individually or collectively with any other
Pacific Telecom Defendant is a majority owner or controls directly or indirectly must create and
retain the following records
A accounting records showing the revenues from all goods or services sold
B personnel records showing for each person providing services whether as an
employee or otherwise that persons name addresses telephone numbers job
Page 14 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 15 of 41
title or position dates of service and (ifapplicable) the reason for termination
C records ofall consumer complaints whether received directly or indirectly such
as through a third party and any response and
D all records necessary to demonstrate full compliance with each provision of this
Order including all submissions to the Commission
X COlmiddotIPLIANCE MONITOIUNG
IT IS FURTHER ORDERED that for the purpose ofmonitoring Pacific Telecom
Defendants compliance with this Order including the financial representations upon which part
of the judgment was suspended and any failure to transfer any assets as required by this Order
A Within fou11een (14) days of receipt of a written request from a representative of
the Commission or Plaintiffs each Pacific Telecom Defendant must submit
additiona] compJiance reports or other requested information which must be
sworn under penalty ofperjury appear for depositions and produce documents
for inspection and copying The Commission and Plaintiffs are also authorized to
obtain discovery without tUrther leave ofcourt using any of the procedures
prescribed by Federal Rules of Civil Procedure 29 30 (including telephonic
depositions) 3 I 33 34 36 45 and 69
B For matters concerning this Order the Commission and Plaintiffs are authorized
to communicate directly with each Pacific Telecom Defendant Pacific Telecom
Defendants must permit representatives of the Commission and Plaintiffs to
interview any employee or other person affiliated with any Pacific Telecom
Defendant who has agreed to such an interview The person interviewed may
have cotmsel present
Page 15 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 16 of 41
C The Commission and Plaintiffs may use all other lawful means including posing
through their representatives as consumers suppliers or other individuals or
entities to Pacific Telecom Defendants or any individual or entity affiliated with
Pacific Telecom Defendants without the necessity of identification or prior
notice Nothing in this Order limits the Commissions layenful use ofcompulsory
process pursuant to Sections 9 and 20 of the FTC Act 15 USC sectsect 49 57b-l
XI COUNTERCLAIMS
IT IS FURTHER ORDERED that the Pacific Telecom Defendants counterclaims against
the Commission and any Commission employees are hereby dismissed with prejudice
XII RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction modification and enforcement of this Order
SO ORDERED this _ day of_____-- 2017
UNITED STATES DISTRICT JUDGE
Page 16 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 17 of 41
SO STIPULATED AND AGREED
FOR PLAINTIFFS
~=middotmiddot~i-f==_-=~==~ middot E~2=Cer E Brown Sp Bar No A5501993 Biesty Sp BarNoA5501817
rade Commission Division of Marketing Practices 600 Pennsylvania Avegt NW Mailstop CC-8528 Washington DC 20580 (202) 326-2825 cbrown3ftcgov (202) 326-3043 tbeistyftcgov
Page 17of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 18 of 41
THE STATE OF COLORADO
CYNTHIA H COFFMAN Attorney General ~lsfL)
DevinLaiho A~istant Attorney General Consumer Protection Attorneys for State ofColorado Ralph L Carr Colorado Judicial Center 1300 Broadway Seventh Floor Denver CO 80203 (720) 508~6219 (Telephone) DevinLaihostatecous
TIIE STATE OF FLORIDA
PAMELA JO BONDI Attorney Genel-
I j
middottJ f ~middotl i~middot ~ t ( ==--1-~~l-ll~W-middot~- middot~-~-~-~~
Kristen Pcsicek ~
Assistant Attorney General Florida Bar No 109212 110 Southeast Sixth Street Fort Lauderdale Florida 33301 (954) 712-4600 (Telephone) KristenPesicekmyfloridalegalcom
Page 18 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 19 of 41
H~ STATE OF NDIANA
GREGORY F ZOELLER lndiana Attomey General
middot~~pound)~MARG~M SWEENEY 2059 --- Deputy Atto~yGeneral _) Office ofthe Indiana Attorney General 302 W Washington St Sth Floor ndiana Government Center South Indianapolis IN 46204 Telephone 3172321011 Facsimile 3172327979 margueriteswooneyatgingvv
THE STATE OF KANSAS
Assmiddot nt Attorney General Office oftlte Kansas Attorney General 120SW10th Avenue 2nd Floor Topeka KS 66612 (785) 296-3751 (Telephone) (785) 291-3699 (Facsimile) James Welcbagksgov KateCarteragksgov
Page 19 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 20 of 41
CHRIS KOSTBR Missouri Attorney General
Mary D middot onis Mo Bar 60921 Assi Attorney General PO Box86l St Louis MO 63188 (314) 340-6816 (Tclcphcmc) (314) 340-7981 (Fax) MatyMoajsagotnQsre
Page20of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 21of41
THE STATE OFNORIE CAROLINA
ROY COOPER North ~a Attorney General
DaNK1rlltmalt NBUN088Ss~ Special Deputy Attorney General Consumer Protection Division North Carolina Department ofJustice 114 West Edenton Street P0Box629 Raleigh NC 27602-0629 (919) 716-6033 (Telephone) (919) 716-6050 (Fax) dkirlonanncdojgov
1HE STATE OF OHlO
MICHAEL DEWINE Ohlo Attorney General
eganE~iJlloll1
Associate Assistant Attorney General Consumer Protection Section Office ofOhio Attorney Genetal Michael De Wine One Government Center Suite 1340 Toledo OH 43604 (419) 245-2550 (Telephone) (877) 588-5480 (Fax) meganmcnultyohioattomeygeneraljov
Page21 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 22 of 41
THE STAE OF TENNESSEE
middot Jim R liaj ai1~ B middot No030662 ChiefofCompliance Tennessee Regulatory Authority S02 J)coadrlck Street 4th Floor (615) 77()6895 (felephone) Nhville Tennessee 37243 JimRLaymantngov middot
THE STAflt OF WASHINGTON
ROBERT W FERGUSON
~~~~ LEILANI FISHERS ~33 Assistant Attorney Getgteial Consumer Protection Division Washington State Attorney Oenerals Office 800 Fifth Ave Ste 2000 Seattle WA 98104 (206) 464-6098 tellanifatgwagov
Page22 of23
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
----
ocument 90-1 Entered ori FLSD Docket 01272017 Page 23 of 41
liOR DEFENDANTS
Da_te ~0JI
31SW5th Ave ntone Accuardi Esq
ortland Oregon 97201 503) 223-7747 taxlawjusticecom COUNSEL FOR DEFENDANTS
DEFENDANTS
Date
Fred Accuardi INDIVIDUALLY AND AS AN OFFICER OF PACIFIC TELECOM COMMUNICATIONS GROUP TELEPHONE MANAGEMENT CORPORATION TM CALLER ID LLC INTERNATIONAL TELEPHONE CORPORATION and INTERNATIONAL TELEPHONE LLC
Page 23 of23
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 24 of 41
I lt ~ I bullbull 1
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 25 of 41
Appendix A
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
AUTHENTICATE~
~i9cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 26 of 41
Federal Trade Commission sect3102
PART 310-TELEMARKETING SALES RULE 16 CFR PART 310
Sec 3101 Scope of regulations in this part 3102 Definitions 3103 Deceptive telemarketing acts or pracshy
tices 3104 Abusive telemarketing acts or pracshy
tices 3105 Recordkeeping requirements 3106 Exemptions 3107 Actions by states and private persons 3108 Fee for access to the National Do Not
Call Registry 3109 Severablty
AUTHORITY 15 USC 6101~108
SOURCE 75 FR 48516 Aug 10 2010 unless otherwise noted
sect 3101 Scope of regulations in this part
This part implements the Teleshymarketing and Consumer Fraud and Abuse Prevention Act 15 USC 6101shy6108 as amended
sect 3102 Definitions
(a) Acquirer means a business organishyzation financial institution or an agent of a business organization or fishynancial institution that has authority from an organization that operates or licenses a credit card system to authorshyize merchants to accept transmit or process payment by credit card through the credit card system for money goods or services or anything else of value
381
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 27 of 41
sect 3102
(b) Attorney General means the chief
legal officer of a state
(c) Billing information means any data
that enables any person to access a
customerrsquos or donorrsquos account such as
a credit card checking savings share
or similar account utility bill mortshy
gage loan account or debit card
(d) Caller identification service means a
service that allows a telephone subshy
scriber to have the telephone number
and where available name of the callshy
ing party transmitted contemporashy
neously with the telephone call and
displayed on a device in or connected
to the subscriberrsquos telephone
(e) Cardholder means a person to
whom a credit card is issued or who is
authorized to use a credit card on beshy
half of or in addition to the person to
whom the credit card is issued
(f) Charitable contribution means any
donation or gift of money or any other
thing of value
(g) Commission means the Federal
Trade Commission
(h) Credit means the right granted by
a creditor to a debtor to defer payment
of debt or to incur debt and defer its
payment
(i) Credit card means any card plate
coupon book or other credit device exshy
isting for the purpose of obtaining
money property labor or services on
credit
(j) Credit card sales draft means any
record or evidence of a credit card
transaction
(k) Credit card system means any
method or procedure used to process
credit card transactions involving credshy
it cards issued or licensed by the opershy
ator of that system
(l) Customer means any person who is
or may be required to pay for goods or
services offered through teleshy
marketing
(m) Debt relief service means any proshy
gram or service represented directly or
by implication to renegotiate settle
or in any way alter the terms of payshy
ment or other terms of the debt beshy
tween a person and one or more unseshy
cured creditors or debt collectors inshy
cluding but not limited to a reduction
in the balance interest rate or fees
owed by a person to an unsecured credshy
itor or debt collector
16 CFR Ch I (1ndash1ndash16 Edition)
(n) Donor means any person solicited
to make a charitable contribution
(o) Established business relationship means a relationship between a seller
and a consumer based on
(1) the consumerrsquos purchase rental
or lease of the sellerrsquos goods or services
or a financial transaction between the
consumer and seller within the eightshy
een (18) months immediately preceding
the date of a telemarketing call or
(2) the consumerrsquos inquiry or applicashy
tion regarding a product or service ofshy
fered by the seller within the three (3)
months immediately preceding the
date of a telemarketing call
(p) Free-to-pay conversion means in
an offer or agreement to sell or provide
any goods or services a provision
under which a customer receives a
product or service for free for an initial
period and will incur an obligation to
pay for the product or service if he or
she does not take affirmative action to
cancel before the end of that period
(q) Investment opportunity means anyshy
thing tangible or intangible that is ofshy
fered offered for sale sold or traded
based wholly or in part on representashy
tions either express or implied about
past present or future income profit
or appreciation
(r) Material means likely to affect a
personrsquos choice of or conduct regardshy
ing goods or services or a charitable
contribution
(s) Merchant means a person who is
authorized under a written contract
with an acquirer to honor or accept
credit cards or to transmit or process
for payment credit card payments for
the purchase of goods or services or a
charitable contribution
(t) Merchant agreement means a writshy
ten contract between a merchant and
an acquirer to honor or accept credit
cards or to transmit or process for
payment credit card payments for the
purchase of goods or services or a charshy
itable contribution
(u) Negative option feature means in
an offer or agreement to sell or provide
any goods or services a provision
under which the customerrsquos silence or
failure to take an affirmative action to
reject goods or services or to cancel the
agreement is interpreted by the seller
as acceptance of the offer
382
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 28 of 41
Federal Trade Commission
(v) Outbound telephone call means a
telephone call initiated by a teleshy
marketer to induce the purchase of
goods or services or to solicit a charishy
table contribution
(w) Person means any individual
group unincorporated association limshy
ited or general partnership corporashy
tion or other business entity
(x) Preacquired account information means any information that enables a
seller or telemarketer to cause a
charge to be placed against a cusshy
tomerrsquos or donorrsquos account without obshy
taining the account number directly
from the customer or donor during the
telemarketing transaction pursuant to
which the account will be charged
(y) Prize means anything offered or
purportedly offered and given or purshy
portedly given to a person by chance
For purposes of this definition chance
exists if a person is guaranteed to reshy
ceive an item and at the time of the
offer or purported offer the teleshy
marketer does not identify the specific
item that the person will receive
(z) Prize promotion means
(1) A sweepstakes or other game of
chance or
(2) An oral or written express or imshy
plied representation that a person has
won has been selected to receive or
may be eligible to receive a prize or
purported prize
(aa) Seller means any person who in
connection with a telemarketing transshy
action provides offers to provide or
arranges for others to provide goods or
services to the customer in exchange
for consideration
(bb) State means any state of the
United States the District of Columshy
bia Puerto Rico the Northern Mariana
Islands and any territory or possession
of the United States
(cc) Telemarketer means any person
who in connection with telemarketing
initiates or receives telephone calls to
or from a customer or donor
(dd) Telemarketing means a plan proshy
gram or campaign which is conducted
to induce the purchase of goods or servshy
ices or a charitable contribution by
use of one or more telephones and
which involves more than one intershy
state telephone call The term does not
include the solicitation of sales
through the mailing of a catalog
sect 3102
which contains a written description
or illustration of the goods or services
offered for sale includes the business
address of the seller includes multiple
pages of written material or illustrashy
tions and has been issued not less freshy
quently than once a year when the
person making the solicitation does
not solicit customers by telephone but
only receives calls initiated by cusshy
tomers in response to the catalog and
during those calls takes orders only
without further solicitation For purshy
poses of the previous sentence the
term lsquolsquofurther solicitationrsquorsquo does not
include providing the customer with
information about or attempting to
sell any other item included in the
same catalog which prompted the cusshy
tomerrsquos call or in a substantially simishy
lar catalog
(ee) Upselling means soliciting the
purchase of goods or services following
an initial transaction during a single
telephone call The upsell is a separate
telemarketing transaction not a conshy
tinuation of the initial transaction An
lsquolsquoexternal upsellrsquorsquo is a solicitation
made by or on behalf of a seller difshy
ferent from the seller in the initial
transaction regardless of whether the
initial transaction and the subsequent
solicitation are made by the same teleshy
marketer An lsquolsquointernal upsellrsquorsquo is a soshy
licitation made by or on behalf of the
same seller as in the initial transshy
action regardless of whether the inishy
tial transaction and subsequent solicishy
tation are made by the same teleshy
marketer
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3102 was amended by redesignating
paragraphs (aa) through (ee) as paragraphs
(dd) through (hh) redesignating paragraphs
(f) through (z) as paragraphs (h) through
(bb) and adding new paragraphs (f) (g) and
(cc) effective Feb 12 2016 For the convenshy
ience of the user the added text is set forth
as follows
sect 3102 Definitions
(f) Cash-to-cash money transfer means the
electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act (15 USC 7006(2)) transfer of
the value of cash received from one person to
another person in a different location that is
383
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 29 of 41
sect 3103
sent by a money transfer provider and reshy
ceived in the form of cash For purposes of
this definition money transfer provider means
any person or financial institution that proshy
vides cash-to-cash money transfers for a pershy
son in the normal course of its business
whether or not the person holds an account
with such person or financial institution
The term cash-to-cash money transfer includes
a remittance transfer as defined in section
919(g)(2) of the Electronic Fund Transfer Act
(lsquolsquoEFTArsquorsquo) 15 USC 1693a that is a cash-to-
cash transaction however it does not include
any transaction that is (1) An electronic fund transfer as defined in
section 903 of the EFTA (2) Covered by Regulation E 12 CFR
100520 pertaining to gift cards or (3) Subject to the Truth in Lending Act 15
USC 1601 et seq (g) Cash reload mechanism is a device aushy
thorization code personal identification
number or other security measure that
makes it possible for a person to convert
cash into an electronic (as defined in section
106(2) of the Electronic Signatures in Global
and National Commerce Act (15 USC
7006(2)) form that can be used to add funds to
a general-use prepaid card as defined in Regshy
ulation E 12 CFR 10052 or an account with
a payment intermediary For purposes of
this definition a cash reload mechanism is
not itself a general-use prepaid debit card or
a swipe reload process or similar method in
which funds are added directly onto a pershy
sonrsquos own general-use prepaid card or acshy
count with a payment intermediary
(cc) Remotely created payment order means
any payment instruction or order drawn on a
personrsquos account that is created by the payee
or the payeersquos agent and deposited into or
cleared through the check clearing system
The term includes without limitation a
lsquolsquoremotely created checkrsquorsquo as defined in Regshy
ulation CC Availability of Funds and Collecshy
tion of Checks 12 CFR 2292(fff) but does not
include a payment order cleared through an
Automated Clearinghouse (ACH) Network or
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
part 1026
sect 3103 Deceptive telemarketing acts or practices
(a) Prohibited deceptive telemarketing acts or practices It is a deceptive teleshy
marketing act or practice and a violashy
tion of this Rule for any seller or teleshy
marketer to engage in the following
conduct
16 CFR Ch I (1ndash1ndash16 Edition)
(1) Before a customer consents to
pay 659 for goods or services offered
failing to disclose truthfully in a clear
and conspicuous manner the following
material information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of the sales offer 660
(ii) All material restrictions limitashy
tions or conditions to purchase reshy
ceive or use the goods or services that
are the subject of the sales offer
(iii) If the seller has a policy of not
making refunds cancellations exshy
changes or repurchases a statement
informing the customer that this is the
sellerrsquos policy or if the seller or teleshy
marketer makes a representation
about a refund cancellation exchange
or repurchase policy a statement of all
material terms and conditions of such
policy
(iv) In any prize promotion the odds
of being able to receive the prize and
if the odds are not calculable in adshy
vance the factors used in calculating
the odds that no purchase or payment
is required to win a prize or to particishy
pate in a prize promotion and that any
purchase or payment will not increase
the personrsquos chances of winning and
the no-purchaseno-payment method of
participating in the prize promotion
with either instructions on how to parshy
ticipate or an address or local or toll-
free telephone number to which cusshy
tomers may write or call for informashy
tion on how to participate
659 When a seller or telemarketer uses or
directs a customer to use a courier to transshy
port payment the seller or telemarketer
must make the disclosures required by
sect 3103(a)(1) before sending a courier to pick
up payment or authorization for payment or
directing a customer to have a courier pick
up payment or authorization for payment In
the case of debt relief services the seller or
telemarketer must make the disclosures reshy
quired by sect 3103(a)(1) before the consumer enshy
rolls in an offered program 660 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the disclosure requireshy
ments under the Truth in Lending Act and
Regulation Z shall constitute compliance
with sect 3103(a)(1)(i) of this Rule
384
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 30 of 41
Federal Trade Commission
(v) All material costs or conditions
to receive or redeem a prize that is the
subject of the prize promotion
(vi) In the sale of any goods or servshy
ices represented to protect insure or
otherwise limit a customerrsquos liability
in the event of unauthorized use of the
customerrsquos credit card the limits on a
cardholderrsquos liability for unauthorized
use of a credit card pursuant to 15
USC 1643
(vii) If the offer includes a negative
option feature all material terms and
conditions of the negative option feashy
ture including but not limited to the
fact that the customerrsquos account will
be charged unless the customer takes
an affirmative action to avoid the
charge(s) the date(s) the charge(s) will
be submitted for payment and the speshy
cific steps the customer must take to
avoid the charge(s) and
(viii) In the sale of any debt relief
service
(A) the amount of time necessary to
achieve the represented results and to
the extent that the service may include
a settlement offer to any of the cusshy
tomerrsquos creditors or debt collectors
the time by which the debt relief servshy
ice provider will make a bona fide setshy
tlement offer to each of them
(B) to the extent that the service
may include a settlement offer to any
of the customerrsquos creditors or debt colshy
lectors the amount of money or the
percentage of each outstanding debt
that the customer must accumulate beshy
fore the debt relief service provider
will make a bona fide settlement offer
to each of them
(C) to the extent that any aspect of
the debt relief service relies upon or reshy
sults in the customerrsquos failure to make
timely payments to creditors or debt
collectors that the use of the debt reshy
lief service will likely adversely affect
the customerrsquos creditworthiness may
result in the customer being subject to
collections or sued by creditors or debt
collectors and may increase the
amount of money the customer owes
due to the accrual of fees and interest
and
(D) to the extent that the debt relief
service requests or requires the cusshy
tomer to place funds in an account at
an insured financial institution that
the customer owns the funds held in
sect 3103
the account the customer may withshy
draw from the debt relief service at any
time without penalty and if the cusshy
tomer withdraws the customer must
receive all funds in the account other
than funds earned by the debt relief
service in compliance with
sect 3104(a)(5)(i)(A) through (C)
(2) Misrepresenting directly or by
implication in the sale of goods or
services any of the following material
information
(i) The total costs to purchase reshy
ceive or use and the quantity of any
goods or services that are the subject
of a sales offer
(ii) Any material restriction limitashy
tion or condition to purchase receive
or use goods or services that are the
subject of a sales offer
(iii) Any material aspect of the pershy
formance efficacy nature or central
characteristics of goods or services
that are the subject of a sales offer
(iv) Any material aspect of the nashy
ture or terms of the sellerrsquos refund
cancellation exchange or repurchase
policies
(v) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
that a purchase or payment is required
to win a prize or to participate in a
prize promotion
(vi) Any material aspect of an investshy
ment opportunity including but not
limited to risk liquidity earnings poshy
tential or profitability
(vii) A sellerrsquos or telemarketerrsquos afshy
filiation with or endorsement or sponshy
sorship by any person or government
entity
(viii) That any customer needs ofshy
fered goods or services to provide proshy
tections a customer already has pursushy
ant to 15 USC 1643
(ix) Any material aspect of a negashy
tive option feature including but not
limited to the fact that the customerrsquos
account will be charged unless the cusshy
tomer takes an affirmative action to
avoid the charge(s) the date(s) the
charge(s) will be submitted for payshy
ment and the specific steps the cusshy
tomer must take to avoid the
charge(s) or
385
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 31 of 41
sect 3103
(x) Any material aspect of any debt
relief service including but not limshy
ited to the amount of money or the
percentage of the debt amount that a
customer may save by using such servshy
ice the amount of time necessary to
achieve the represented results the
amount of money or the percentage of
each outstanding debt that the cusshy
tomer must accumulate before the proshy
vider of the debt relief service will inishy
tiate attempts with the customerrsquos
creditors or debt collectors or make a
bona fide offer to negotiate settle or
modify the terms of the customerrsquos
debt the effect of the service on a cusshy
tomerrsquos creditworthiness the effect of
the service on collection efforts of the
customerrsquos creditors or debt collectors
the percentage or number of customers
who attain the represented results and
whether a debt relief service is offered
or provided by a non-profit entity
(3) Causing billing information to be
submitted for payment or collecting or
attempting to collect payment for
goods or services or a charitable conshy
tribution directly or indirectly withshy
out the customerrsquos or donorrsquos express
verifiable authorization except when
the method of payment used is a credit
card subject to protections of the
Truth in Lending Act and Regulation
Z661 or a debit card subject to the proshy
tections of the Electronic Fund Transshy
fer Act and Regulation E662 Such aushy
thorization shall be deemed verifiable
if any of the following means is emshy
ployed
(i) Express written authorization by
the customer or donor which includes
the customerrsquos or donorrsquos signature663
(ii) Express oral authorization which
is audio-recorded and made available
upon request to the customer or donor
and the customerrsquos or donorrsquos bank or
other billing entity and which evishy
dences clearly both the customerrsquos or
661 Truth in Lending Act 15 USC 1601 et
seq and Regulation Z 12 CFR part 226 662 Electronic Fund Transfer Act 15 USC
1693 et seq and Regulation E 12 CFR part
205 663 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
donorrsquos authorization of payment for
the goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction and the cusshy
tomerrsquos or donorrsquos receipt of all of the
following information
(A) The number of debits charges or
payments (if more than one)
(B) The date(s) the debit(s)
charge(s) or payment(s) will be subshy
mitted for payment
(C) The amount(s) of the debit(s)
charge(s) or payment(s)
(D) The customerrsquos or donorrsquos name
(E) The customerrsquos or donorrsquos billing
information identified with sufficient
specificity such that the customer or
donor understands what account will
be used to collect payment for the
goods or services or charitable conshy
tribution that are the subject of the
telemarketing transaction
(F) A telephone number for customer
or donor inquiry that is answered durshy
ing normal business hours and
(G) The date of the customerrsquos or doshy
norrsquos oral authorization or
(iii) Written confirmation of the
transaction identified in a clear and
conspicuous manner as such on the
outside of the envelope sent to the
customer or donor via first class mail
prior to the submission for payment of
the customerrsquos or donorrsquos billing inforshy
mation and that includes all of the inshy
formation contained in
sectsect 3103(a)(3)(ii)(A)-(G) and a clear and
conspicuous statement of the proceshy
dures by which the customer or donor
can obtain a refund from the seller or
telemarketer or charitable organizashy
tion in the event the confirmation is
inaccurate provided however that
this means of authorization shall not
be deemed verifiable in instances in
which goods or services are offered in a
transaction involving a free-to-pay
conversion and preacquired account inshy
formation
(4) Making a false or misleading
statement to induce any person to pay
for goods or services or to induce a
charitable contribution
(b) Assisting and facilitating It is a deshy
ceptive telemarketing act or practice
and a violation of this Rule for a pershy
son to provide substantial assistance or
support to any seller or telemarketer
when that person knows or consciously
386
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 32 of 41
Federal Trade Commission
avoids knowing that the seller or teleshy
marketer is engaged in any act or pracshy
tice that violates sectsect 3103(a) (c) or (d)
or sect 3104 of this Rule
(c) Credit card laundering Except as
expressly permitted by the applicable
credit card system it is a deceptive
telemarketing act or practice and a
violation of this Rule for
(1) A merchant to present to or deshy
posit into or cause another to present
to or deposit into the credit card sysshy
tem for payment a credit card sales
draft generated by a telemarketing
transaction that is not the result of a
telemarketing credit card transaction
between the cardholder and the mershy
chant
(2) Any person to employ solicit or
otherwise cause a merchant or an emshy
ployee representative or agent of the
merchant to present to or deposit into
the credit card system for payment a
credit card sales draft generated by a
telemarketing transaction that is not
the result of a telemarketing credit
card transaction between the card-
holder and the merchant or
(3) Any person to obtain access to the
credit card system through the use of a
business relationship or an affiliation
with a merchant when such access is
not authorized by the merchant agreeshy
ment or the applicable credit card sysshy
tem
(d) Prohibited deceptive acts or pracshytices in the solicitation of charitable conshytributions It is a fraudulent charitable
solicitation a deceptive telemarketing
act or practice and a violation of this
Rule for any telemarketer soliciting
charitable contributions to misrepreshy
sent directly or by implication any of
the following material information
(1) The nature purpose or mission of
any entity on behalf of which a charishy
table contribution is being requested
(2) That any charitable contribution
is tax deductible in whole or in part
(3) The purpose for which any charishy
table contribution will be used
(4) The percentage or amount of any
charitable contribution that will go to
a charitable organization or to any
particular charitable program
(5) Any material aspect of a prize
promotion including but not limited
to the odds of being able to receive a
prize the nature or value of a prize or
sect 3104
that a charitable contribution is reshy
quired to win a prize or to participate
in a prize promotion or
(6) A charitable organizationrsquos or
telemarketerrsquos affiliation with or enshy
dorsement or sponsorship by any pershy
son or government entity
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3103 was amended by redesignating
paragraphs (a)(3)(ii)(A) through (G) as parashy
graphs (a)(3)(ii)(B) through (H) and adding
new paragraph (a)(3)(ii)(A) eff Feb 12 2016
For the convenience of the user the added
text is set forth as follows
sect 3103 Deceptive telemarketing acts or practices
(a)
(3)
(ii)
(A) An accurate description clearly and
conspicuously stated of the goods or servshy
ices or charitable contribution for which
payment authorization is sought
sect 3104 Abusive telemarketing acts or practices
(a) Abusive conduct generally It is an
abusive telemarketing act or practice
and a violation of this Rule for any
seller or telemarketer to engage in the
following conduct
(1) Threats intimidation or the use
of profane or obscene language
(2) Requesting or receiving payment
of any fee or consideration for goods or
services represented to remove derogashy
tory information from or improve a
personrsquos credit history credit record
or credit rating until
(i) The time frame in which the seller
has represented all of the goods or
services will be provided to that person
has expired and
(ii) The seller has provided the person
with documentation in the form of a
consumer report from a consumer reshy
porting agency demonstrating that the
promised results have been achieved
such report having been issued more
than six months after the results were
achieved Nothing in this Rule should
be construed to affect the requirement
in the Fair Credit Reporting Act 15
USC 1681 that a consumer report
may only be obtained for a specified
permissible purpose
387
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 33 of 41
sect 3104
(3) Requesting or receiving payment
of any fee or consideration from a pershy
son for goods or services represented to
recover or otherwise assist in the reshy
turn of money or any other item of
value paid for by or promised to that
person in a previous telemarketing
transaction until seven (7) business
days after such money or other item is
delivered to that person This provision
shall not apply to goods or services
provided to a person by a licensed atshy
torney
(4) Requesting or receiving payment
of any fee or consideration in advance
of obtaining a loan or other extension
of credit when the seller or teleshy
marketer has guaranteed or repshy
resented a high likelihood of success in
obtaining or arranging a loan or other
extension of credit for a person
(5)(i) Requesting or receiving payshy
ment of any fee or consideration for
any debt relief service until and unless
(A) The seller or telemarketer has reshy
negotiated settled reduced or othershy
wise altered the terms of at least one
debt pursuant to a settlement agreeshy
ment debt management plan or other
such valid contractual agreement exeshy
cuted by the customer
(B) The customer has made at least
one payment pursuant to that settleshy
ment agreement debt management
plan or other valid contractual agreeshy
ment between the customer and the
creditor or debt collector and
(C) To the extent that debts enrolled
in a service are renegotiated settled
reduced or otherwise altered individshy
ually the fee or consideration either
(1) Bears the same proportional relashy
tionship to the total fee for renegotishy
ating settling reducing or altering
the terms of the entire debt balance as
the individual debt amount bears to
the entire debt amount The individual
debt amount and the entire debt
amount are those owed at the time the
debt was enrolled in the service or
(2) Is a percentage of the amount
saved as a result of the renegotiation
settlement reduction or alteration
The percentage charged cannot change
from one individual debt to another
The amount saved is the difference beshy
tween the amount owed at the time the
debt was enrolled in the service and the
16 CFR Ch I (1ndash1ndash16 Edition)
amount actually paid to satisfy the
debt
(ii) Nothing in sect 3104(a)(5)(i) prohibits
requesting or requiring the customer
to place funds in an account to be used
for the debt relief providerrsquos fees and
for payments to creditors or debt colshy
lectors in connection with the renegoshy
tiation settlement reduction or other
alteration of the terms of payment or
other terms of a debt provided that
(A) The funds are held in an account
at an insured financial institution
(B) The customer owns the funds held
in the account and is paid accrued inshy
terest on the account if any
(C) The entity administering the acshy
count is not owned or controlled by or
in any way affiliated with the debt reshy
lief service
(D) The entity administering the acshy
count does not give or accept any
money or other compensation in exshy
change for referrals of business involvshy
ing the debt relief service and
(E) The customer may withdraw from
the debt relief service at any time
without penalty and must receive all
funds in the account other than funds
earned by the debt relief service in
compliance with sect 3104(a)(5)(i)(A)
through (C) within seven (7) business
days of the customerrsquos request
(6) Disclosing or receiving for conshy
sideration unencrypted consumer acshy
count numbers for use in teleshy
marketing provided however that
this paragraph shall not apply to the
disclosure or receipt of a customerrsquos or
donorrsquos billing information to process a
payment for goods or services or a
charitable contribution pursuant to a
transaction
(7) Causing billing information to be
submitted for payment directly or inshy
directly without the express informed
consent of the customer or donor In
any telemarketing transaction the
seller or telemarketer must obtain the
express informed consent of the cusshy
tomer or donor to be charged for the
goods or services or charitable conshy
tribution and to be charged using the
identified account In any teleshy
marketing transaction involving
preacquired account information the
requirements in paragraphs (a)(7)(i)
through (ii) of this section must be met
to evidence express informed consent
388
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 34 of 41
Federal Trade Commission
(i) In any telemarketing transaction
involving preacquired account informashy
tion and a free-to-pay conversion feashy
ture the seller or telemarketer must
(A) Obtain from the customer at a
minimum the last four (4) digits of the
account number to be charged
(B) Obtain from the customer his or
her express agreement to be charged
for the goods or services and to be
charged using the account number purshy
suant to paragraph (a)(7)(i)(A) of this
section and
(C) Make and maintain an audio reshy
cording of the entire telemarketing
transaction
(ii) In any other telemarketing transshy
action involving preacquired account
information not described in paragraph
(a)(7)(i) of this section the seller or
telemarketer must
(A) At a minimum identify the acshy
count to be charged with sufficient
specificity for the customer or donor to
understand what account will be
charged and
(B) Obtain from the customer or
donor his or her express agreement to
be charged for the goods or services
and to be charged using the account
number identified pursuant to parashy
graph (a)(7)(ii)(A) of this section or
(8) Failing to transmit or cause to be
transmitted the telephone number
and when made available by the teleshy
marketerrsquos carrier the name of the
telemarketer to any caller identificashy
tion service in use by a recipient of a
telemarketing call provided that it
shall not be a violation to substitute
(for the name and phone number used
in or billed for making the call) the
name of the seller or charitable organishy
zation on behalf of which a teleshy
marketing call is placed and the sellshy
errsquos or charitable organizationrsquos cusshy
tomer or donor service telephone numshy
ber which is answered during regular
business hours
(b) Pattern of calls (1) It is an abusive
telemarketing act or practice and a
violation of this Rule for a teleshy
marketer to engage in or for a seller
to cause a telemarketer to engage in
the following conduct
(i) Causing any telephone to ring or
engaging any person in telephone conshy
versation repeatedly or continuously
sect 3104
with intent to annoy abuse or harass
any person at the called number
(ii) Denying or interfering in any
way directly or indirectly with a pershy
sonrsquos right to be placed on any registry
of names andor telephone numbers of
persons who do not wish to receive outshy
bound telephone calls established to
comply with sect 3104(b)(1)(iii)
(iii) Initiating any outbound teleshy
phone call to a person when
(A) That person previously has stated
that he or she does not wish to receive
an outbound telephone call made by or
on behalf of the seller whose goods or
services are being offered or made on
behalf of the charitable organization
for which a charitable contribution is
being solicited or
(B) That personrsquos telephone number
is on the lsquolsquodo-not-callrsquorsquo registry mainshy
tained by the Commission of persons
who do not wish to receive outbound
telephone calls to induce the purchase
of goods or services unless the seller
(i) Has obtained the express agreeshy
ment in writing of such person to
place calls to that person Such written
agreement shall clearly evidence such
personrsquos authorization that calls made
by or on behalf of a specific party may
be placed to that person and shall inshy
clude the telephone number to which
the calls may be placed and the signashy
ture664 of that person or
(ii) Has an established business relashy
tionship with such person and that
person has not stated that he or she
does not wish to receive outbound teleshy
phone calls under paragraph
(b)(1)(iii)(A) of this section or
(iv) Abandoning any outbound teleshy
phone call An outbound telephone call
is lsquolsquoabandonedrsquorsquo under this section if a
person answers it and the telemarketer
does not connect the call to a sales repshy
resentative within two (2) seconds of
the personrsquos completed greeting
(v) Initiating any outbound telephone
call that delivers a prerecorded messhy
sage other than a prerecorded message
permitted for compliance with the call
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
389
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 35 of 41
sect 3104
abandonment safe harbor in sect 3104(b)(4)(iii) unless
(A) In any such call to induce the purchase of any good or service the seller has obtained from the recipient of the call an express agreement in writing that
(i) The seller obtained only after a clear and conspicuous disclosure that the purpose of the agreement is to aushythorize the seller to place prerecorded calls to such person
(ii) The seller obtained without reshyquiring directly or indirectly that the agreement be executed as a condition of purchasing any good or service
(iii) Evidences the willingness of the recipient of the call to receive calls that deliver prerecorded messages by or on behalf of a specific seller and
(iv) Includes such personrsquos telephone number and signature665 and
(B) In any such call to induce the purchase of any good or service or to induce a charitable contribution from a member of or previous donor to a non-profit charitable organization on whose behalf the call is made the seller or telemarketer
(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings before disconnecting an unanshyswered call and
(ii) Within two (2) seconds after the completed greeting of the person called plays a prerecorded message that promptly provides the disclosures required by sect 3104(d) or (e) followed immediately by a disclosure of one or both of the following
(A) In the case of a call that could be answered in person by a consumer that the person called can use an automated
interactive voice andor keypress-actishy
vated opt-out mechanism to assert a
Do Not Call request pursuant to
sect 3104(b)(1)(iii)(A) at any time during
the message The mechanism must (1) Automatically add the number
called to the sellerrsquos entity-specific Do
Not Call list (2) Once invoked immediately disshy
connect the call and
665 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
16 CFR Ch I (1ndash1ndash16 Edition)
(3) Be available for use at any time
during the message and
(B) In the case of a call that could be
answered by an answering machine or
voicemail service that the person
called can use a toll-free telephone
number to assert a Do Not Call request
pursuant to sect 3104(b)(1)(iii)(A) The
number provided must connect directly
to an automated interactive voice or
keypress-activated opt-out mechanism
that
(1) Automatically adds the number
called to the sellerrsquos entity-specific Do
Not Call list
(2) Immediately thereafter disshy
connects the call and
(3) Is accessible at any time throughshy
out the duration of the telemarketing
campaign and
(iii) Complies with all other requireshy
ments of this part and other applicable
federal and state laws
(C) Any call that complies with all
applicable requirements of this parashy
graph (v) shall not be deemed to violate
sect 3104(b)(1)(iv) of this part
(D) This paragraph (v) shall not apply
to any outbound telephone call that deshy
livers a prerecorded healthcare messhy
sage made by or on behalf of a covered
entity or its business associate as
those terms are defined in the HIPAA
Privacy Rule 45 CFR 160103
(2) It is an abusive telemarketing act
or practice and a violation of this Rule
for any person to sell rent lease purshy
chase or use any list established to
comply with sect 3104(b)(1)(iii)(A) or
maintained by the Commission pursushy
ant to sect 3104(b)(1)(iii)(B) for any purshy
pose except compliance with the provishy
sions of this Rule or otherwise to preshy
vent telephone calls to telephone numshy
bers on such lists
(3) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(ii)
and (iii) if it can demonstrate that as
part of the sellerrsquos or telemarketerrsquos
routine business practice
(i) It has established and impleshy
mented written procedures to comply
with sect 3104(b)(1)(ii) and (iii)
(ii) It has trained its personnel and
any entity assisting in its compliance
in the procedures established pursuant
to sect 3104(b)(3)(i)
(iii) The seller or a telemarketer or
another person acting on behalf of the
390
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 36 of 41
Federal Trade Commission
seller or charitable organization has
maintained and recorded a list of teleshy
phone numbers the seller or charitable
organization may not contact in comshy
pliance with sect 3104(b)(1)(iii)(A)
(iv) The seller or a telemarketer uses
a process to prevent telemarketing to
any telephone number on any list esshy
tablished pursuant to sect 3104(b)(3)(iii) or
3104(b)(1)(iii)(B) employing a version
of the lsquolsquodo-not-callrsquorsquo registry obtained
from the Commission no more than
thirty-one (31) days prior to the date
any call is made and maintains
records documenting this process
(v) The seller or a telemarketer or
another person acting on behalf of the
seller or charitable organization monshy
itors and enforces compliance with the
procedures established pursuant to
sect 3104(b)(3)(i) and
(vi) Any subsequent call otherwise
violating sect 3104(b)(1)(ii) or (iii) is the
result of error
(4) A seller or telemarketer will not
be liable for violating sect 3104(b)(1)(iv) if
(i) The seller or telemarketer emshy
ploys technology that ensures abanshy
donment of no more than three (3) pershy
cent of all calls answered by a person
measured over the duration of a single
calling campaign if less than 30 days
or separately over each successive 30-
day period or portion thereof that the
campaign continues
(ii) The seller or telemarketer for
each telemarketing call placed allows
the telephone to ring for at least fifshy
teen (15) seconds or four (4) rings before
disconnecting an unanswered call
(iii) Whenever a sales representative
is not available to speak with the pershy
son answering the call within two (2)
seconds after the personrsquos completed
greeting the seller or telemarketer
promptly plays a recorded message
that states the name and telephone
number of the seller on whose behalf
the call was placed666 and
(iv) The seller or telemarketer in acshy
cordance with sect 3105(b)-(d) retains
records establishing compliance with
sect 3104(b)(4)(i)-(iii)
666 This provision does not affect any sellshy
errsquos or telemarketerrsquos obligation to comply
with relevant state and federal laws includshy
ing but not limited to the TCPA 47 USC
227 and 47 CFR part 641200
sect 3104
(c) Calling time restrictions Without
the prior consent of a person it is an
abusive telemarketing act or practice
and a violation of this Rule for a teleshy
marketer to engage in outbound teleshy
phone calls to a personrsquos residence at
any time other than between 800 am
and 900 pm local time at the called
personrsquos location
(d) Required oral disclosures in the sale of goods or services It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call or internal
or external upsell to induce the purshy
chase of goods or services to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the seller
(2) That the purpose of the call is to
sell goods or services
(3) The nature of the goods or servshy
ices and
(4) That no purchase or payment is
necessary to be able to win a prize or
participate in a prize promotion if a
prize promotion is offered and that any
purchase or payment will not increase
the personrsquos chances of winning This
disclosure must be made before or in
conjunction with the description of the
prize to the person called If requested
by that person the telemarketer must
disclose the no-purchaseno-payment
entry method for the prize promotion
provided however that in any intershy
nal upsell for the sale of goods or servshy
ices the seller or telemarketer must
provide the disclosures listed in this
section only to the extent that the inshy
formation in the upsell differs from the
disclosures provided in the initial teleshy
marketing transaction
(e) Required oral disclosures in charishytable solicitations It is an abusive teleshy
marketing act or practice and a violashy
tion of this Rule for a telemarketer in
an outbound telephone call to induce a
charitable contribution to fail to disshy
close truthfully promptly and in a
clear and conspicuous manner to the
person receiving the call the following
information
(1) The identity of the charitable orshy
ganization on behalf of which the reshy
quest is being made and
391
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 37 of 41
sect 3105
(2) That the purpose of the call is to solicit a charitable contribution
[75 FR 48516 Aug 10 2010 as amended at 76
FR 58716 Sept 22 2011]
EFFECTIVE DATE NOTE At 80 FR 77558 Dec
14 2015 sect 3104 was amended by revising parashy
graphs (a)(3) (b)(1)(ii) (iii)(B) and (3)(vi) efshy
fective February 12 2016 and in paragraph
(a)(7)(ii)(B) by removing lsquolsquoorrsquorsquo from the end of
the paragraph in paragraph (a)(8) by removshy
ing the final period and adding a semicolon
in its place and by adding paragraphs (a)(9)
and (10) effective June 13 2016 For the conshy
venience of the user the added and revised
text is set forth as follows
sect 3104 Abusive telemarketing acts or pracshytices
(a) (3) Requesting or receiving payment of any
fee or consideration from a person for goods
or services represented to recover or othershy
wise assist in the return of money or any
other item of value paid for by or promised
to that person in a previous transaction
until seven (7) business days after such
money or other item is delivered to that pershy
son This provision shall not apply to goods
or services provided to a person by a licensed
attorney
(9) Creating or causing to be created dishy
rectly or indirectly a remotely created payshy
ment order as payment for goods or services
offered or sold through telemarketing or as a
charitable contribution solicited or sought
through telemarketing or (10) Accepting from a customer or donor
directly or indirectly a cash-to-cash money
transfer or cash reload mechanism as payshy
ment for goods or services offered or sold
through telemarketing or as a charitable
contribution solicited or sought through
telemarketing (b) (1) (ii) Denying or interfering in any way dishy
rectly or indirectly with a personrsquos right to
be placed on any registry of names andor
telephone numbers of persons who do not
wish to receive outbound telephone calls esshy
tablished to comply with paragraph
(b)(1)(iii)(A) of this section including but
not limited to harassing any person who
makes such a request hanging up on that
person failing to honor the request requirshy
ing the person to listen to a sales pitch beshy
fore accepting the request assessing a
charge or fee for honoring the request reshy
quiring a person to call a different number to
submit the request and requiring the person
to identify the seller making the call or on
whose behalf the call is made (iii)
16 CFR Ch I (1ndash1ndash16 Edition)
(B) That personrsquos telephone number is on
the lsquolsquodo-not-callrsquorsquo registry maintained by
the Commission of persons who do not wish
to receive outbound telephone calls to inshy
duce the purchase of goods or services unless
the seller or telemarketer
(1) Can demonstrate that the seller has obshy
tained the express agreement in writing of
such person to place calls to that person
Such written agreement shall clearly evishy
dence such personrsquos authorization that calls
made by or on behalf of a specific party may
be placed to that person and shall include
the telephone number to which the calls may
be placed and the signature 664 of that person
or
(2) Can demonstrate that the seller has an
established business relationship with such
person and that person has not stated that
he or she does not wish to receive outbound
telephone calls under paragraph (b)(1)(iii)(A)
of this section or
(3)
(vi) Any subsequent call otherwise vioshy
lating paragraph (b)(1)(ii) or (iii) of this secshy
tion is the result of error and not of failure
to obtain any information necessary to comshy
ply with a request pursuant to paragraph
(b)(1)(iii)(A) of this section not to receive
further calls by or on behalf of a seller or
charitable organization
sect 3105 Recordkeeping requirements
(a) Any seller or telemarketer shall
keep for a period of 24 months from
the date the record is produced the folshy
lowing records relating to its teleshy
marketing activities
(1) All substantially different advershy
tising brochures telemarketing
scripts and promotional materials
(2) The name and last known address
of each prize recipient and the prize
awarded for prizes that are repshy
resented directly or by implication to
have a value of $2500 or more
(3) The name and last known address
of each customer the goods or services
purchased the date such goods or servshy
ices were shipped or provided and the
664 For purposes of this Rule the term
lsquolsquosignaturersquorsquo shall include an electronic or
digital form of signature to the extent that
such form of signature is recognized as a
valid signature under applicable federal law
or state contract law
392
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 38 of 41
Federal Trade Commission
amount paid by the customer for the
goods or services667
(4) The name any fictitious name
used the last known home address and
telephone number and the job title(s)
for all current and former employees
directly involved in telephone sales or
solicitations provided however that if
the seller or telemarketer permits ficshy
titious names to be used by employees
each fictitious name must be traceable
to only one specific employee and
(5) All verifiable authorizations or
records of express informed consent or
express agreement required to be proshy
vided or received under this Rule
(b) A seller or telemarketer may
keep the records required by sect 3105(a)
in any form and in the same manner
format or place as they keep such
records in the ordinary course of busishy
ness Failure to keep all records reshy
quired by sect 3105(a) shall be a violation
of this Rule
(c) The seller and the telemarketer
calling on behalf of the seller may by
written agreement allocate responsishy
bility between themselves for the recshy
ordkeeping required by this Section
When a seller and telemarketer have
entered into such an agreement the
terms of that agreement shall govern
and the seller or telemarketer as the
case may be need not keep records
that duplicate those of the other If the
agreement is unclear as to who must
maintain any required record(s) or if
no such agreement exists the seller
shall be responsible for complying with
sectsect 3105(a)(1)-(3) and (5) the teleshy
marketer shall be responsible for comshy
plying with sect 3105(a)(4)
(d) In the event of any dissolution or
termination of the sellerrsquos or teleshy
marketerrsquos business the principal of
that seller or telemarketer shall mainshy
tain all records as required under this
section In the event of any sale asshy
signment or other change in ownership
of the sellerrsquos or telemarketerrsquos busishy
ness the successor business shall mainshy
667 For offers of consumer credit products
subject to the Truth in Lending Act 15
USC 1601 et seq and Regulation Z 12 CFR
226 compliance with the recordkeeping reshy
quirements under the Truth in Lending Act
and Regulation Z shall constitute complishy
ance with sect 3105(a)(3) of this Rule
sect 3106
tain all records required under this secshy
tion
sect 3106 Exemptions
(a) Solicitations to induce charitable
contributions via outbound telephone
calls are not covered by
sect 3104(b)(1)(iii)(B) of this Rule
(b) The following acts or practices
are exempt from this Rule
(1) The sale of pay-per-call services
subject to the Commissionrsquos Rule entishy
tled lsquolsquoTrade Regulation Rule Pursuant
to the Telephone Disclosure and Disshy
pute Resolution Act of 1992rsquorsquo 16 CFR
part 308 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(2) The sale of franchises subject to
the Commissionrsquos Rule entitled lsquolsquoDisshy
closure Requirements and Prohibitions
Concerning Franchisingrsquorsquo (lsquolsquoFranchise
Rulersquorsquo) 16 CFR part 436 and the sale of
business opportunities subject to the
Commissionrsquos Rule entitled lsquolsquoDiscloshy
sure Requirements and Prohibitions
Concerning Business Opportunitiesrsquorsquo
(lsquolsquoBusiness Opportunity Rulersquorsquo) 16 CFR
part 437 provided however that this
exemption does not apply to the reshy
quirements of sectsect 3104(a)(1) (a)(7) (b)
and (c)
(3) Telephone calls in which the sale
of goods or services or charitable solicshy
itation is not completed and payment
or authorization of payment is not reshy
quired until after a face-to-face sales
or donation presentation by the seller
or charitable organization provided
however that this exemption does not
apply to the requirements of
sectsect 3104(a)(1) (a)(7) (b) and (c)
(4) Telephone calls initiated by a cusshy
tomer or donor that are not the result
of any solicitation by a seller charishy
table organization or telemarketer
provided however that this exemption
does not apply to any instances of
upselling included in such telephone
calls
(5) Telephone calls initiated by a cusshy
tomer or donor in response to an advershy
tisement through any medium other
than direct mail solicitation provided
however that this exemption does not
apply to calls initiated by a customer
393
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 39 of 41
sect 3107
or donor in response to an advertiseshy
ment relating to investment opportunishy
ties debt relief services business opshy
portunities other than business arshy
rangements covered by the Franchise
Rule or Business Opportunity Rule or
advertisements involving goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls
(6) Telephone calls initiated by a cusshy
tomer or donor in response to a direct
mail solicitation including solicitashy
tions via the US Postal Service facshy
simile transmission electronic mail
and other similar methods of delivery
in which a solicitation is directed to
specific address(es) or person(s) that
clearly conspicuously and truthfully
discloses all material information listshy
ed in sect 3103(a)(1) of this Rule for any
goods or services offered in the direct
mail solicitation and that contains no
material misrepresentation regarding
any item contained in sect 3103(d) of this
Rule for any requested charitable conshy
tribution provided however that this
exemption does not apply to calls initishy
ated by a customer in response to a dishy
rect mail solicitation relating to prize
promotions investment opportunities
debt relief services business opportunishy
ties other than business arrangements
covered by the Franchise Rule or Busishy
ness Opportunity Rule or goods or
services described in sectsect 3103(a)(1)(vi) or
3104(a)(2)-(4) or to any instances of
upselling included in such telephone
calls and
(7) Telephone calls between a teleshy
marketer and any business except
calls to induce the retail sale of nonshy
durable office or cleaning supplies proshyvided however that sect 3104(b)(1)(iii)(B)
and sect 3105 of this Rule shall not apply
to sellers or telemarketers of nonshy
durable office or cleaning supplies
EFFECTIVE DATE NOTE At 80 FR 77559 Dec
14 2015 sect 3106 was amended by revising parashy
graphs (b)(5) (6) and (7) effective Feb 12
2016 and by adding paragraphs (b)(5)(ii) and
(6)(ii) effective June 13 2016 For the convenshy
ience of the user the added and revised text
is set forth as follows
sect 3106 Exemptions
16 CFR Ch I (1ndash1ndash16 Edition)
(b) (5) Telephone calls initiated by a customer
or donor in response to an advertisement
through any medium other than direct mail
solicitation provided however that this exshy
emption does not apply to (i) Calls initiated by a customer or donor
in response to an advertisement relating to
investment opportunities debt relief servshy
ices business opportunities other than busishy
ness arrangements covered by the Franchise
Rule or Business Opportunity Rule or advershy
tisements involving offers for goods or servshy
ices described in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls (6) Telephone calls initiated by a customer
or donor in response to a direct mail solicitashy
tion including solicitations via the US
Postal Service facsimile transmission elecshy
tronic mail and other similar methods of deshy
livery in which a solicitation is directed to
specific address(es) or person(s) that clearly
conspicuously and truthfully discloses all
material information listed in sect 3103(a)(1)
for any goods or services offered in the direct
mail solicitation and that contains no mateshy
rial misrepresentation regarding any item
contained in sect 3103(d) for any requested charshy
itable contribution provided however that
this exemption does not apply to (i) Calls initiated by a customer in reshy
sponse to a direct mail solicitation relating
to prize promotions investment opportunishy
ties debt relief services business opportunishy
ties other than business arrangements covshy
ered by the Franchise Rule or Business Opshy
portunity Rule or goods or services deshy
scribed in sect 3103(a)(1)(vi) or sect 3104(a)(2)
through (4) (ii) The requirements of sect 3104(a)(9) or (10)
or (iii) Any instances of upselling included in
such telephone calls and (7) Telephone calls between a telemarketer
and any business to induce the purchase of
goods or services or a charitable contribushy
tion by the business except calls to induce
the retail sale of nondurable office or cleanshy
ing supplies provided however that
sectsect 3104(b)(1)(iii)(B) and 3105 shall not apply
to sellers or telemarketers of nondurable ofshy
fice or cleaning supplies
sect 3107 Actions by states and private persons
(a) Any attorney general or other ofshyficer of a state authorized by the state
to bring an action under the Teleshy
marketing and Consumer Fraud and
Abuse Prevention Act and any private
person who brings an action under that
Act shall serve written notice of its
394
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 40 of 41
Federal Trade Commission
action on the Commission if feasible
prior to its initiating an action under
this Rule The notice shall be sent to
the Office of the Director Bureau of
Consumer Protection Federal Trade
Commission Washington DC 20580 and
shall include a copy of the statersquos or
private personrsquos complaint and any
other pleadings to be filed with the
court If prior notice is not feasible
the state or private person shall serve
the Commission with the required noshy
tice immediately upon instituting its
action
(b) Nothing contained in this Section
shall prohibit any attorney general or
other authorized state official from
proceeding in state court on the basis
of an alleged violation of any civil or
criminal statute of such state
sect 3108 Fee for access to the National Do Not Call Registry
(a) It is a violation of this Rule for
any seller to initiate or cause any
telemarketer to initiate an outbound
telephone call to any person whose
telephone number is within a given
area code unless such seller either dishy
rectly or through another person first
has paid the annual fee required by
sect 3108(c) for access to telephone numshy
bers within that area code that are inshy
cluded in the National Do Not Call
Registry maintained by the Commisshy
sion under sect 3104(b)(1)(iii)(B) provided
however that such payment is not necshy
essary if the seller initiates or causes
a telemarketer to initiate calls solely
to persons pursuant to
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(b) It is a violation of this Rule for
any telemarketer on behalf of any sellshy
er to initiate an outbound telephone
call to any person whose telephone
number is within a given area code unshy
less that seller either directly or
through another person first has paid
the annual fee required by sect 3108(c)
for access to the telephone numbers
within that area code that are included
in the National Do Not Call Registry
provided however that such payment
is not necessary if the seller initiates
or causes a telemarketer to initiate
calls solely to persons pursuant to
sect 3108
sectsect 3104(b)(1)(iii)(B)(i) or (ii) and the
seller does not access the National Do
Not Call Registry for any other purshy
pose
(c) The annual fee which must be
paid by any person prior to obtaining
access to the National Do Not Call
Registry is $60 for each area code of
data accessed up to a maximum of
$16482 provided however that there
shall be no charge to any person for acshy
cessing the first five area codes of data
and provided further that there shall be
no charge to any person engaging in or
causing others to engage in outbound
telephone calls to consumers and who
is accessing area codes of data in the
National Do Not Call Registry if the
person is permitted to access but is
not required to access the National Do
Not Call Registry under this Rule 47
CFR 641200 or any other Federal regushy
lation or law Any person accessing the
National Do Not Call Registry may not
participate in any arrangement to
share the cost of accessing the regshy
istry including any arrangement with
any telemarketer or service provider to
divide the costs to access the registry
among various clients of that teleshy
marketer or service provider
(d) Each person who pays either dishy
rectly or through another person the
annual fee set forth in sect 3108(c) each
person excepted under sect 3108(c) from
paying the annual fee and each person
excepted from paying an annual fee
under sect 3104(b)(1)(iii)(B) will be proshy
vided a unique account number that
will allow that person to access the
registry data for the selected area
codes at any time for the twelve month
period beginning on the first day of the
month in which the person paid the fee
(lsquolsquothe annual periodrsquorsquo) To obtain access
to additional area codes of data during
the first six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $60
for each additional area code of data
not initially selected To obtain access
to additional area codes of data during
the second six months of the annual peshy
riod each person required to pay the
fee under sect 3108(c) must first pay $30
for each additional area code of data
not initially selected The payment of
the additional fee will permit the pershy
son to access the additional area codes
395
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396
Case 015-cv-60423-WJZ Document 90-1 Entered on FLSD Docket 01272017 Page 41 of 41
sect 3109
of data for the remainder of the annual period
(e) Access to the National Do Not Call Registry is limited to teleshymarketers sellers others engaged in or causing others to engage in telephone calls to consumers service providers acting on behalf of such persons and any government agency that has law enforcement authority Prior to accessshying the National Do Not Call Registry a person must provide the identifying information required by the operator of the registry to collect the fee and must certify under penalty of law that the person is accessing the regshyistry solely to comply with the provishysions of this Rule or to otherwise preshyvent telephone calls to telephone numshybers on the registry If the person is acshycessing the registry on behalf of sellshyers that person also must identify each of the sellers on whose behalf it is accessing the registry must provide each sellerrsquos unique account number for access to the national registry and must certify under penalty of law that the sellers will be using the inforshymation gathered from the registry solely to comply with the provisions of
this Rule or otherwise to prevent teleshy
phone calls to telephone numbers on
the registry
[75 FR 48516 Aug 10 2010 75 FR 51934 Aug
24 2010 as amended at 77 FR 51697 Aug 27
2012 78 FR 53643 Aug 30 2013 79 FR 51478
Aug 29 2014]
EFFECTIVE DATE NOTE At 80 FR 77560 Dec
14 2015 sect 3108 was amended by revising parashy
graph (c) effective Feb 16 2016 For the conshy
venience of the user the revised text is set
forth as follows
sect 3108 Fee for access to the National Do Not Call Registry
(c) The annual fee which must be paid by
any person prior to obtaining access to the
National Do Not Call Registry is $60 for each
area code of data accessed up to a maximum
of $16482 provided however that there shall
be no charge to any person for accessing the
first five area codes of data and provided
further that there shall be no charge to any
person engaging in or causing others to enshy
gage in outbound telephone calls to conshy
sumers and who is accessing area codes of
data in the National Do Not Call Registry if
the person is permitted to access but is not
required to access the National Do Not Call
16 CFR Ch I (1ndash1ndash16 Edition)
Registry under this Rule 47 CFR 641200 or
any other Federal regulation or law No pershy
son may participate in any arrangement to
share the cost of accessing the National Do
Not Call Registry including any arrangeshy
ment with any telemarketer or service proshy
vider to divide the costs to access the regshy
istry among various clients of that teleshy
marketer or service provider
sect 3109 Severability The provisions of this Rule are sepashy
rate and severable from one another If any provision is stayed or determined to be invalid it is the Commissionrsquos inshytention that the remaining provisions shall continue in effect
396